NEW YORK (TheStreet) -- Semiconductor company Atmel (ATML)  beat fourth-quarter earnings estimates Wednesday after the bell, and that news, coupled with the company's new dividend, should earn the stock attention from investors.

Atmel surprised investors by initiating a dividend, the lack of which had kept would-be investors at bay. But will it be enough?

Atmel stock closed Wednesday at $8.40, up 0.60%. The shares have traded about flat year to date, slightly besting both the Dow Jones Industrial Average and the S&P 500, which are both down about 0.84%.

But with the San Jose, Calif.-based company having initiated a 4-cent-a-share dividend, payable March 26 to shareholders of record as of March 16, Atmel is showing the financial strength and confidence deserving of investors' patience. It represents the company's first cash dividend in its 30-year history.

What's more, that fourth-quarter results included non-generally accepted accounting principles gross margins climbing 2 percentage points sequentially and almost 5 points year over year shows that Atmel's ability to return value to shareholders appears to have staying power.

The maker of microcontrollers for mobile touch screens, reported fourth-quarter net income of $49.2 million, or 12 cents a share on an adjusted basis, beating estimates by a penny. For the year, Atmel said that it earned $32.2 million or 8 cents a share.

Revenue for the quarter was $346 million, falling 8% year over year and slightly missing estimates of $346.8 million but was $1.41 billion for the full year, about matching projections.

Atmel, which competes with, among others, Texas Instruments (TXN - Get Report) , is proud of its fourth-quarter and full-year performance. And despite the downbeat guidance, the company explained how its results should be assessed and where it plans to go.

"We are pleased with full-year 2014 financial performance as our core microcontroller business generated solid growth," said Chief Executive Steve Laub in a statement. "Atmel's operating model was transformed to sustainably higher margins, and we delivered a record number of new products in the high-growth IoT and security markets."

To Laub's point regarding "transformed to sustainably higher margins," Atmel's products aren't the cheapest compared with products from Microchip Technology (MCHP - Get Report) or Synaptics (SYNA - Get Report) .

In that regard, that the company missed its fourth-quarter revenue estimates is likely because in its transformation to higher-margin business, Atmel turned away opportunities and business that didn't meet its margin criteria.

But because the company initiated its first-ever dividend, which can only be sustained by consistent bottom line results, suggests that Atmel understands its direction and shouldn't be judged solely by revenue results or its guidance.

In short, this was a solid quarter for a company that is rarely mentioned among the top chip stocks. With earnings projected to grow at a 17.5% annual rate over the next five years, Atmel's results and its new dividend have earned the stock a place in investors' portfolio.

Follow @Richard_WSPB

TheStreet Ratings team rates ATMEL CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate ATMEL CORP (ATML) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including relatively poor performance when compared with the S&P 500 during the past year and weak operating cash flow."

You can view the full analysis from the report here: ATML Ratings Report

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.