Microchip (MCHP) Well Poised With Healthy Organic Growth

On Aug 12, Zacks Investment Research updated the research report on premium semiconductor manufacturer Microchip Technology Incorporated (NASDAQ:MCHP) .

Microchip is one of the fastest-growing providers of 16-bit and 32-bit microcontrollers in the world. The microcontroller business of the company continued to outperform the industry and enabled it to gain significant market share. Microchip expects to continue this momentum and strengthen its position as the best-performing microcontroller franchise in the industry. The company is increasingly expanding its touch business beyond handsets and tablets in areas, such as automotive industrial applications.

The Analog business has also become one of the largest analog franchises in the market. In order to further capitalize on this burgeoning business potential, Microchip is developing and introducing a wide range of innovative and proprietary new products.

Despite a challenging macroeconomic environment, Microchip reported relatively healthy first-quarter fiscal 2017 results. Non-GAAP net income (from continuing operations) for the reported quarter was $194.0 million or 84 cents per share compared with $148.9 million or 69 cents per share in the year-earlier quarter. Net revenue (GAAP) for the reported quarter was $799.4 million, up 49.7% year over year, while non-GAAP revenues were up 58.1% to an all-time high of $844 million.

High quality standards, solid performance, reliability, ease of use, pricing and diversity in products make Microchip one of the better-positioned companies in the semiconductor market. With a diligent focus on right-sizing the various components of inventory holding, Microchip’s investment strategy takes a holistic view of the rapidly evolving market and deploys a dynamic capital allocation approach. Over the years, Microchip has consistently returned significant cash to its shareholders through dividends and share repurchases.

Barring minor hiccups, Microchip’s share prices have steadily been on an uptrend since July this year. The stock is currently trading at a forward P/E of 20.8x and has long-term earnings growth expectation of 11.3%. All these offer a lucrative investment proposition for investors seeking to own blue-chip stocks that promise a healthy return on investments. Some other companies in the industry worth considering include Silicon Laboratories Inc. (NASDAQ:SLAB) , Inphi Corporation (NYSE:IPHI) and Fairchild Semiconductor International Inc. (NASDAQ:FCS) .

MICROCHIP TECH (MCHP): Free Stock Analysis Report

FAIRCHILD SEMI (FCS): Free Stock Analysis Report

SILICON LAB INC (SLAB): Free Stock Analysis Report

INPHI CORP (IPHI): Free Stock Analysis Report

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