KLA stock heads toward 7th-straight gain after dividend boosted, $2 billion added to buyback program

Shares of KLA Corp. (KLAC) rose 0.2% in premarket trading Tuesday toward a seventh-straight gain, after the semiconductor equipment maker raised its dividend by 11.5% and increased its stock repurchase program by $2 billion. The new quarterly dividend was lifted to $1.45 a share from $1.30 a share. Based on Friday's stock closing price of $507.02, the new annual dividend rate implies a dividend yield of 1.14%, which compares with the yield for the VanEck Semiconductor ETF (SMH) of 0.77% and the implied yield for the S&P 500 of 1.52%. The increase in the stock buyback program adds to the $1.6 billion left in the previous program, to given KLA authorization to buy back up to $3.6 billion worth of stock, which represents about 5.2% of the company's market capitalization of $69.32 billion. "Today's announcement is consistent with KLA's long-standing confidence in our business model focused on product differentiation, free cash flow generation, and assertive capital allocation," said Chief Executive Rick Wallace. The stock has gained 10.7% over the past three months through Friday, while the VanEck chip ETF has tacked on 8.3% and the S&P 500 has gained 5.7%.

-Tomi Kilgore

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09-05-23 0629ET

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