Uncovering Dividend Opportunities with NASDAQ:LRCX.

Last update: Oct 7, 2024

LAM RESEARCH CORP (NASDAQ:LRCX) is a hidden gem unveiled by our stock screening tool, featuring a promising dividend outlook alongside solid fundamentals. NASDAQ:LRCX demonstrates decent financial health and profitability while ensuring a sustainable dividend. Let's break it down further.

A Closer Look at Dividend for NASDAQ:LRCX

An integral part of ChartMill's stock analysis is the Dividend Rating, which spans from 0 to 10. This rating evaluates diverse dividend factors, including yield, historical data, growth, and sustainability. NASDAQ:LRCX has received a 7 out of 10:

Compared to an average industry Dividend Yield of 2.16, LRCX pays a better dividend. On top of this LRCX pays more dividend than 81.65% of the companies listed in the same industry.
The dividend of LRCX is nicely growing with an annual growth rate of 11.41%!
LRCX has been paying a dividend for at least 10 years, so it has a reliable track record.
As LRCX did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
26.62% of the earnings are spent on dividend by LRCX. This is a low number and sustainable payout ratio.
LRCX's earnings are growing more than its dividend. This makes the dividend growth sustainable.

Exploring NASDAQ:LRCX's Health

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:LRCX, the assigned 7 reflects its health status:

LRCX has an Altman-Z score of 4.58. This indicates that LRCX is financially healthy and has little risk of bankruptcy at the moment.
LRCX has a debt to FCF ratio of 1.17. This is a very positive value and a sign of high solvency as it would only need 1.17 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.17, LRCX is in the better half of the industry, outperforming 76.15% of the companies in the same industry.
Although LRCX does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
A Current Ratio of 2.97 indicates that LRCX has no problem at all paying its short term obligations.

Profitability Examination for NASDAQ:LRCX

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:LRCX has achieved a 9:

LRCX's Return On Assets of 20.42% is amongst the best of the industry. LRCX outperforms 94.50% of its industry peers.
LRCX has a Return On Equity of 44.82%. This is amongst the best in the industry. LRCX outperforms 98.17% of its industry peers.
The Return On Invested Capital of LRCX (26.43%) is better than 98.17% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for LRCX is significantly above the industry average of 10.70%.
The last Return On Invested Capital (26.43%) for LRCX is well below the 3 year average (31.96%), which needs to be investigated, but indicates that LRCX had better years and this may not be a problem.
LRCX has a better Profit Margin (25.68%) than 86.24% of its industry peers.
LRCX's Profit Margin has improved in the last couple of years.
LRCX has a Operating Margin of 29.02%. This is amongst the best in the industry. LRCX outperforms 90.83% of its industry peers.
LRCX's Operating Margin has improved in the last couple of years.

Every day, new Best Dividend stocks can be found on ChartMill in our Best Dividend screener.

For an up to date full fundamental analysis you can check the fundamental report of LRCX

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.