6 Bullish Stocks Paying Big Dividends

AMAT Revenue data by YCharts

Applied Materials (AMAT)

Background: Applied Materials develops, manufactures, markets and services semiconductor wafer fabrication equipment and related spare parts for the worldwide semiconductor industry. The company was founded in 1967 and trades an average of 14.4 million shares per day with a marketcap of $15.3 billion.

52-Week Range: $9.70 - $13.94

Yield: 3%

Investors received 36 cents annually in dividend payments. I want to see increases and we have them for the last three years and over the last five years.

In the last three years, the company paid an average of 27 cents in dividends. I have no way to know if we can expect the trend to continue, but I put a lot of weight into the past. Dividends have moved up a headline-grabbing 13.4% on average per year during the last five years.

Analyst opinion is mixed. Applied Materials only has six buy recommendations out of 17 analysts, and two recommend selling. The average analyst target price for AMAT is $13.04. The upside is partially masked by the recent volatility in earnings and price.

Shares are still relatively cheap. The mean fiscal year estimate price-to-earnings ratio is 16.5, based on earnings of 73 cents per share this year.

From a technical analysis view, shares are trading within a bullish flag and holding above the 200-day moving average.

As long as the price remains above the key 200-day moving average, it's a buy. I would not be too quick to take a stop loss. The last reported short interest is only 1.5%, and nothing I would worry about.

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