Yahoo Finance Universal Display (OLED) Hikes Quarterly Dividend Payout
Universal Display Corporation OLED recently hiked its quarterly dividend payout by about 16.7% to 35 cents per share or $1.40 on an annualized basis. The news seemed to have struck the right chords with investors as the firm’s share price gained post its release.
Based on the closing price of $136.01 on Feb 27, 2023, the proposed dividend affirms a modest yield of 1.03%. A steady dividend payout is part of Universal Display’s long-term strategy to provide attractive risk-adjusted returns to its stockholders. Additionally, healthy dividend increases at periodic intervals have been one of its key strengths.
In concurrence with the dividend hike, Universal Display reported solid fourth-quarter 2022 results, with the bottom and the top lines beating the Zacks Consensus Estimate. Despite macroeconomic headwinds, the company's ongoing innovation efforts, investments in infrastructure development and capacity expansion resulted in top-line growth year over year.
Net income during the reported quarter was $65.1 million or $1.36 per share compared with $45.9 million or 96 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 43 cents. Lower operating expenses and top-line expansion led to growth in net income year over year.
Revenues were $169 million, up 16% from $146.2 million in the year-ago quarter. The figure surpassed the consensus estimate of $150 million. Backed by the company’s robust patent portfolio and strong demand for AR/VR display applications, the renewal of license agreements on a long-term basis boosted OLED’s fourth-quarter revenues.
We believe strong end-market demand presents a significant growth opportunity for Universal Display over the long term. OLED is suitable for commercial usage in a number of industries, including smartphones, television, virtual reality devices and automotive markets. The increasing proliferation of smartphones, wearables and tablets is driving the adoption of small-area OLEDs. Large-area OLED displays are increasingly used in televisions. Further, unlike LEDs, OLEDs can be viewed directly and don’t need diffusers. It is also expected to be cost-effective when manufactured in high volumes, which makes it suitable for commercial application in the solid-state lighting market.
Universal Display’s dominance in OLED technology is primarily driven by its strong portfolio of 5,000 patents worldwide. The strong patent portfolio also helps it to earn significant licensing revenues. The company’s UniversalPHOLED phosphorescent OLED technology produces OLEDs that are four times more efficient than fluorescent OLEDs and significantly more efficient than current LCDs. This provides Universal Display with a competitive advantage over other OLED makers.
All these positives and sound financial management probably led to the quarterly dividend hike.
Universal Display currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Juniper Networks, Inc. JNPR carries a Zacks Rank #2. It has a long-term earnings growth expectation of 7% and delivered an earnings surprise of 1.6%, on average, in the trailing four quarters.
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