Applied Materials stock surges after setting new $6 billion repurchase program, increasing dividend

Shares of Applied Materials Inc.
AMAT,
-1.06%

surged 3.6% in premarket trading Friday, after the semiconductor-equipment maker nearly doubled its repurchase authorization and boosted its dividend by 8.3%. The company said it set a new stock buyback program of $6 billion, which supplements the previous program that had $3.2 billion remaining. The new program represents 5.4% of Applied Materials’ market capitalization of $110.4 billion as of Thursday’s close. The company also raised its quarterly dividend to 26 cents a share from 24 cents, with the new dividend payable June 16 to shareholders of record on May 26. Based on Thursday’s stock closing price of $124.97, the new annual dividend rate implies a dividend yield of 0.83%, compared with the yield for the VanEck Semiconductor ETF
SMH,
-2.25%

of 0.63% and the implied yield for the S&P 500
SPX,
-1.30%

of 1.50%. Applied Materials shares have slumped 18.2% over the past three months through Thursday, while the semiconductor ETF lost 18.2% and the S&P 500 slipped 9.6%.