Not one for small gestures, semiconductor manufacturing equipment supplier Applied Materials (AMAT 3.78%) has embarked on another beefy stock repurchase initiative.
The company said that its board has authorized up to $2 billion in share buybacks. It did not specify an end date for the program. The new authorization follows the completion of the company's previous set of buybacks, which totaled $3 billion and was approved just over one year ago.
Additionally, Applied Materials declared its latest quarterly dividend payout. It will dispense $0.10 per share, matching the previous distribution, and yielding 1.6% at the current share price. The upcoming one is to be paid on Sept. 15 to stockholders of record as of Aug. 25.
The new buyback program and the fresh dividend distribution won't be cheap. However, Applied Materials is doing well these days. It recently reported a 15-year high figure for new orders, at $3.5 billion, with a 34% growth in backlog and a forecast for continued strong performance in the near future.
Meanwhile, there was over $2.6 billion in cash in the coffers at the end of the most recently reported quarter. Investors, then, shouldn't worry much about the company's outlay on stock buybacks and dividends.
Actually, Applied Materials' share repurchase habit pales in comparison to that of other prominent companies in the tech sector. Cisco (CSCO 0.27%) approved a $15 billion boost in its buyback initiative earlier this year, while at the end of 2015 IBM (IBM 1.23%) had roughly $5.6 billion remaining from its program.
Similar to Applied Materials, both Cisco and IBM have plenty of cash in their respective war chests. Another similarity is that, in addition to the buybacks, both pay dividends -- and they're very competitive; IBM's payout yields 3.7%, while Cisco's clocks in at 3.6%
