Stock Buy: Microchip Technology

Zacks Investment Research
updated | Zacks.com

Microchip Technology (NASDAQ:MCHP) is a defensive tech stock with a juicy dividend.

Business

Microchip Technology Inc. develops and manufactures semiconductor products for various embedded control applications. Its products include microcontrollers, digital signal controllers, development tools, and memory products.

Growth and Income

Analysts estimate that this Zacks #2 Rank stock will grow its earnings per share 10.7% per year over the long term. The stock also has a dividend yield of 4.8%.

Updated Outlook

On June 8, Microchip reaffirmed its guidance for the June 2010 quarter. Management expects sales of $318 million and non-GAAP earnings per share of $0.52.

Microchip’s President and CEO Steve Sanghi said that the company has seen the strongest ever first two months of the quarter in bookings. Microchip also announced a record backlog building for the September quarter.

Estimates

In the last month, the Zacks Consensus Estimates for fiscal 2011 and fiscal 2012 are each up 4 cents to $1.95 and $2.07, respectively.

Read the April 22 commentary on Microchip Technology.

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