The announcement of share repurchases, dividends, or stock splits can significantly boost investor sentiment in a stock. But when a company announces all three in a matter of days, well, then you get a stock rally. And that’s exactly what’s happening for wafer fabrication solutions provider Lam Research (NASDAQ:LRCX) this month. The company has announced a mega $10 billion stock buyback and a 10-for-1 stock split today.
Lam’s Bonanza for Investors
This major move is part of Lam’s overarching strategy to return about 75% to 100% of its free cash flow to investors in the form of dividends and share buybacks. The $10 billion share buyback program does not have a termination date.
Furthermore, the company has announced a stock split at a ratio of 10:1. The stock split is expected to be effective after market close on October 2. Importantly, the split is aimed at enabling a larger chunk of Lam’s workforce to participate in its employee stock plans.
Earlier this month, Lam announced a quarterly dividend of $2 per share. The LRCX dividend is payable on July 10 to investors of record on June 18. The company’s dividend yield currently stands at about 0.85%.
What Is the Stock Price Prediction for LRCX?
Not surprisingly, Lam’s share price has rallied by nearly 65% over the past year. Overall, the Street has a Moderate Buy consensus rating on the stock, alongside an average LRCX price target of $1017.37.
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