Cypress Semiconductor Corporation Offers Shareholders 40% One-Year Total Returns, 2.4% Dividend Yield (CY)
By: Ned Piplovic,
The Cypress Semiconductor Corporation (NASDAQ:CY) continues to provide its shareholders with a steady stream of dividend income that combined with the share price growth for a total return of nearly 40% over the past year.
While asset appreciation contributed the largest share to the total return, the company continued to distribute a dividend that yields 2.4%. Generally, we look for companies with rising dividend payouts and higher-than-average yields so that the investors can collect the dividend income while waiting for the share price to start rising at a faster pace. However, the Cypress Semiconductor Company is currently distributing flat dividends and the yield has been suppressed by the rapidly rising share price.
The company will distribute its next dividend on company’s April 19, 2018, pay date to all its shareholders of record prior to the March 28, 2018, ex-dividend date.
Cypress Semiconductor Corporation(NASDAQ:CY)
Headquartered in San Jose, California, and founded in 1982, the Cypress Semiconductor Corporation designs, develops, manufactures, markets and sells embedded system solutions. The company’s Microcontroller and Connectivity Division provides microcontroller units (MCUs) and connectivity solutions, including Traveo automotive MCUs, analog power management integrated circuits, capacitive-sensing controllers and TrueTouch touchscreens. Additionally, this division produces Wi-Fi and Bluetooth connectivity solutions, Universal Serial Bus (USB) controllers and wireless Internet of Things (IoT) connectivity solutions. The company’s Memory Products Division provides flash memory solutions and devices, static random-access memory products, ferroelectric memory devices and other specialty memory solutions. After going public in 1986 and trading on the NASDAQ exchange for two years, the company switched to the New York Stock Exchange. However, the company has switched back and has been trading again on the NASDAQ exchange since 2009. The company serves a variety of industries and applications, including automotive, industrial, consumer, PC peripherals, mobile devices, networking, telecommunications, video, data communications and medical markets.
The company distributes its current $0.44 annual dividend in quarterly installments of $0.11. After starting to distribute dividends in 2011, the company hiked its dividend for the first three years and then continued the pay the same amount over the most recent four years. Because of the rapid share price growth over the last year, the current dividend yield retreated to the current 2.4%. However, using the share price from 12 months ago would generate a 3.3% yield. Even calculating the yield with the share price’s daily average of $14.89 over the past 12 months produces a 3% yield figure.
Despite the yield’s decline over the past year, Cypress Semiconductor Corporation’s current yield is still almost twice the 1.24% average yield of the entire Technology sector and 43% higher than the 1.7% simple average of all the companies in the Broad-Line Semiconductor market segment. Excluding the companies that do not pay any dividends, raises the average segment yield to 2.21% and the Cypress Semiconductor Corporation’s current yield is still almost 10% higher.
While the company’s dividend income is steady but modest for now, the share price has been soaring over the past two years on the company’s improving financial results. The share price paused its sharp uptrend from late 2016 and traded relatively flat between $13.00 and $14.50 from early March through August 21, 2017. During this period, the share price reached its 52-week low of $12.79 on May 17, 2017.
However, after dropping near its 52-week low again in late August 2017, the share price grew with just two drops of approximately 15% — in early December 2017 and early February 2018. However, after that February 2018 dip, the share price recovered all those losses in fewer than 30 days and closed on March 8, 2018, at its 52-week high of $18.14. This closing price is 36.5% higher than it was one year earlier, almost 42% above the 52-week low from May 2017 and 177% higher than it was two years ago, at the end of February 2016. Over the past 12 months, the share price and the dividend income delivered a total return of almost 40%. The total return over the past two years was an even more impressive 190%.
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