Applied Materials: A Dividend Payer in the Semiconductor Supply Chain

Applied Materials, Inc. (NASDAQ:AMAT) is one of the 10 Technology Dividend Aristocrats to Buy in 2025.

Semiconductor stocks have delivered solid long-term returns, but investors need to be selective. Among the equipment suppliers, Applied Materials, Inc. (NASDAQ:AMAT) stands out for its broad diversification and consistent dividend policy. With artificial intelligence driving long-term demand, the company is emerging as a compelling option for dividend growth investors.

A technician in a clean room assembling a semiconductor chip using a microscope.

Earlier this year, on March 10, Applied Materials, Inc. (NASDAQ:AMAT) announced a 15% increase to its quarterly dividend, raising it to $0.46 per share. This marks the eighth straight year of dividend hikes. Alongside this, the board approved a new $10 billion share repurchase program, which adds to the $7.6 billion still available under the existing authorization.

Applied Materials, Inc. (NASDAQ:AMAT)’s financial position remains solid. In the most recent quarter, it generated $1.57 billion in operating cash flow and returned $325 million to shareholders through dividends. Free cash flow came in at $1.06 billion. With a dividend payout ratio of just 19%, Applied is distributing only a modest portion of its net income, signaling plenty of room for future increases.

Applied Materials, Inc. (NASDAQ:AMAT)  also holds a leadership position in etch and deposition tools, which are key technologies used in manufacturing high-performance logic chips and DRAM, both of which are in high demand due to the rapid expansion of AI. This market tailwind is expected to support both business growth and continued strength in shareholder returns. AMAT has a dividend yield of 1.09%, as of June 22.

While we acknowledge the potential of AMAT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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