Market Cap: $2.06 BillionShare Price: $13.54 Cypress Semiconductor is worthy of investors' attention, because, as RBC Capital's Freedman, notes, not all dividends are created equal. "Cypress Semi has no U.S. profits, so its dividend is classified as a return of capital, which should receive more favorable tax treatment than a distribution of profit," he told TheStreet. Thanks to its cost structure, the semiconductor specialist makes an operating loss in the United States. This means that, unlike many companies, its quarterly payments are not treated as "qualified dividends," which would be subject to a dividend tax rate of up to 15%. Cypress says that a final decision on the tax treatment of its recent quarterly dividends will be made after the company's 2012 fiscal year-end. Even without the tax benefits, though, Cypress Semiconductor's payment still compares favorably to other tech sector dividends. The San Jose, Calif.-based firm paid its first dividend of 9 cents a share in July 2011, increasing its quarterly payment to 11 cents in March this year. The dividend yields an impressive 3.25% at the company's current share price. Rival Xilinx (XLNX) has a yield of 2.7%, while Integrated Device Technology (IDTI), another competitor, does not pay a dividend. In addition to its dividend, Cypress Semiconductor has also been generous with share buybacks, authorizing a $400 million repurchase program in September 2011, which followed a $600 million buyback authorization a year earlier. Cypress Semiconductor's valuation should also appeal to investors. The company's stock recently hit a 52-week low, and is down almost 20% since the start of this year. Lowered first-quarter expectations have weighed heavily on the company's stock, although this could work in investors' favor, as Cypress looks to rebound in the second half of the year. "We believe
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV