The company has dividend distribution history and has been distributing since 2005. It declared its last dividend in May of this year at $0.40 per share as compared to $0.35 per share last year. The company has shown continuous increment in dividend distribution year-over-year. It is anticipating future cash flow or FCF, of approximately $723 million by June 2014 and $1.01 billion by June 2015. Therefore, as evidenced in rising FCF in coming years and the long dividend history, investors can invest with confidence for regular dividend income.
LED lighting and ceramic package will boost revenue
Cree, Inc. (NASDAQ:CREE) has observed rising demand for LED lighting products. Due to this, it launched a new consumer bulb in March of this year. It reported 23% revenue growth due to this launch in the third quarter. This bulb is priced at $10–very low compared to its competitors, thereby increasing its demand. Moreover, it uses only 6 watts while producing as much light as a 40-watt incandescent. These bulbs will be available exclusively in Home Depot stores, as per the contract with Home Depot. Cree, Inc. (NASDAQ:CREE) is expecting its LED lighting market share will rise to approximately 50% by 2016 from 10% at present. The company expects revenue growth of 20% – 30%, year-over-year, due to the launch of these bulbs for the coming three years.
Cree, Inc. (NASDAQ:CREE) recently introduced two Xlamps, XH-G and XH-B. These are mid power LED products with ceramic base packaging. The Xlamps XH LED family is comprised of high power LEDs used in the display panels of smartphones and LCDs, as well as in indoor and outdoor lighting. Earlier, these XLamps had plastic packaging. The new ceramic packaging will help manufacturers to use fewer LED chips for the same output. Also, ceramic packaged LED products are more heat resistant and perform for longer periods of time under high temperatures, producing the same output. XLamp XH-G and XH-B are cost effective, more efficient, and have a longer lifetime. It is expected that these new Xlamps will replace fluorescent lighting in troffers and panel lights in the coming years.
Cree, Inc. (NASDAQ:CREE) is one of the major LED manufacturers to offer ceramic packaging. With these initiatives, the company’s revenue is expected to rise to $1.3 billion this year, compared to $1.1 billion in 2012.
Conclusion:
Cree, Inc. (NASDAQ:CREE) will gain top line momentum with the launch of its new $10 consumer bulb and the introduction ceramic packaging for Xlamps.
NAND technology in the WFE segment and the rising demand of OLED touch panels in the display segment will boost Applied Materials, Inc. (NASDAQ:AMAT)’s revenue.
KLA-Tencor Corporation (NASDAQ:KLAC)’s new investments in 20 nm and memory chips will generate higher revenue. Also, regular dividends will motivate investors’ interest in the stock.
Therefore, a buy is recommended for these stocks.
The article 3 Must-Have Semiconductor Companies originally appeared on Fool.com and is written by Shweta Dubey.
Shweta Dubey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Shweta is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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