NXP Semiconductors Ramps Up Dividend By 50%, Boosts Share Buyback Plan


NXP Semiconductors raised its quarterly cash dividend by 50% to $0.5625 per share. Shares of the semiconductor company rose almost 1% in Thursday’s extended trading session after declining almost 5% on the day.

NXP Semiconductors (NXPI) announced that the new dividend will be paid on April 5, to shareholders of record as of March 15.

The company’s annual dividend of $2.25 per share now reflects a dividend yield of 1.35%.

Additionally, NXP Semiconductors bumped up its share repurchase authorization by $2 billion. The company now authorized a total of $2.64 billion in share buybacks , including the remaining $640 million of its prior authorization. (See NXPI stock analysis on TipRanks)

On Feb. 25, Citigroup analyst Christopher Danely upgraded the stock to Buy from Hold and increased the price target to $225 (34.5% upside potential) from $182. In a note to investors, the analyst recommends “increase leverage to the cycle” and said, “NXP has higher than average leverage to semiconductor cycles, given its high exposure to the automotive industry.”

“NXP consensus estimates increased the most in the sector during earnings season and this trend should continue as long as the upturn lasts,” Danely added.

The consensus rating among analysts is a Strong Buy based on 14 Buys versus 4 Holds. The average analyst price target stands at $202.41 and implies upside potential of 21% over the next 12 months. That’s after shares already gained about 45% over the past year.

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