For Immediate Release
Chicago, IL – May 24, 2023 – Today, Zacks Investment Ideas feature highlights Texas Instruments TXN, NXP Semiconductors NXPI and Broadcom AVGO.
3 Chip Stocks Suited Nicely for Income Investors
After a rough showing in 2022, many semiconductor stocks are back in style in 2023, delivering outsized gains. SOXX, the iShares Semiconductor ETF, is up more than 25% year-to-date, widely outperforming the S&P 500.
For those with an interest in exposure to chips paired with a passive income stream, three stocks – Texas Instruments, NXP Semiconductors and Broadcom – could all be considered.
Let’s take a closer look at each.
Broadcom is a premier designer, developer, and global supplier of a broad range of semiconductor devices. AVGO shares found plenty of attention following news of a new multiyear, multibillion-dollar deal with heavyweight Apple for components made in the USA.
The company has consistently grown its dividend payout, boasting an impressive 20% five-year annualized dividend growth rate. Shares currently yield 2.7% annually, more than triple the Zacks Computer and Technology sector average.
In addition, the company’s 78.6% TTM return on equity is worth highlighting, indicating a higher efficiency level in generating profit from existing assets relative to peers.
Keep an eye open for Broadcom’s upcoming quarterly release on June 1st; the Zacks Consensus EPS Estimate of $10.13 suggests an 11% climb in earnings year-over-year. It’s worth noting that the quarterly estimate has remained unchanged over the last several months.
NXP Semiconductors is a global semiconductor company providing high-performance mixed signal and standard product solutions used in various applications. Analysts have raised their expectations across the board, helping land the stock into a favorable Zacks Rank #2 (Buy).
Shares currently yield 2.3% annually, with the company’s payout growing by an impressive 40% over the last five years. Similar to AVGO, NXPI’s current yield easily crushes the Zacks sector average.
NXPI shares could also entice value-focused investors, with the current 13.4X forward earnings multiple sitting nicely beneath the 16.9X five-year median and highs of 25.1X in 2022. The stock carries a Style Score of “B” for Value.
Texas Instruments is an original equipment manufacturer of analog, mixed-signal, and digital signal processing (DSP) integrated circuits. Like those above, TXN has had little issue increasingly rewarding its shareholders, sporting a 15% five-year annualized dividend growth rate.
The company has a stellar earnings track record, exceeding earnings and revenue expectations in six consecutive quarters. Just in its latest release, TXN posted a 5% EPS surprise and reported revenue modestly above estimates.
Shares didn’t see a great reaction post-earnings but have since found buyers.
Semiconductors are back in style in 2023 after a harsh 2022, with many delivering positive returns year-to-date.
And for those with an appetite for exposure paired with an income stream, all three stocks above fit the criteria nicely.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
NXP Semiconductors N.V. (NXPI) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
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