24/7 Wall St. Insights
- ASML Holding N.V. (NASDAQ: ASML) just rewarded its shareholders again with a quarterly dividend.
- While its payout is variable, the dividend has grown significantly over the past decade.
- Also: 2 Dividend Legends to Hold Forever.
ASML Holding N.V. (NASDAQ: ASML) is rewarding its shareholders once again, this time a quarterly dividend of $1.655, payable on Thursday, Nov. 7. That is slightly higher than the prior dividend. Note that a disappointing sales outlook in the most recent quarterly report has dragged on the shares lately, but the continuing dividend underscores the management’s commitment to delivering consistent value to investors.
Why Investors Like Dividends
Investors favor dividend stocks for two main reasons. The first is that they offer enticing total return potential. Total return is a comprehensive measure of investment performance that includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. It is one of the most effective ways to boost the prospects of overall investing success.
Dividend stocks can also provide investors with a steady, reliable stream of passive income. Passive income is money that is earned with little to no ongoing effort, usually from assets that generate cash flow. This income can come from a variety of sources, including stock dividends. Generating passive income is a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.
ASML’s Dividend
ASML has paid a quarterly dividend since late 2022, ranging from $1.34 to over $1.87 per share. Before that, dividends were semi-annual or annual back to 2013, when the payout was about $0.69 a share. Thus, the dividend has increased around 171% since then.
Note that the share price has grown by about 41% since late 2022 as well, offering investors some growth along with the income.
The Company
ASML develops, produces, markets, sells, and services advanced semiconductor equipment systems for chipmakers. It offers advanced semiconductor equipment systems, including lithography, metrology, and inspection systems. The company also provides extreme ultraviolet lithography systems. Its deep ultraviolet lithography systems include immersion and dry lithography solutions to manufacture various range of semiconductor nodes and technologies.
In addition, it offers metrology and inspection systems, including YieldStar optical metrology systems to assess the quality of patterns on the wafers. Its HMI electron beam solutions to locate and analyze individual chip defects. Further, the company provides computational lithography solutions, and lithography systems and control software solutions, and it refurbishes and upgrades lithography systems, as well as offers customer support and related services.
The company operates in Japan, South Korea, Singapore, Taiwan, China, and the rest of Asia; the Netherlands and the rest of Europe, the Middle East; Africa; and the United States. The company was formerly known as ASM Lithography and changed its name in 2001.
Its headquarters are in Veldhoven, the Netherlands. The company was founded in 1984 as a joint venture between the Dutch companies ASM and Philips. It became independent in 1988 and went public in 1995. The company competes with or is similar to Cadence Design Systems Inc. (NASDAQ: CDNS), Lam Research Corp. (NASDAQ: LRCX), and MKS Instruments Inc. (NASDAQ: MKSI).
The stock often is included among artificial intelligence (AI) stocks, and it is considered a prime candidate for a stock split. ASML CEO Christophe Fouquet recently told Bloomberg that he expects the United States to continue pressing for restrictions on semiconductor sales to China. Earlier this month, ASML suffered an accidental early release of quarterly results that revealed a weak 2025 sales forecast.
The Stock
The share price has grown more than 147% in the past five years, outperforming the Nasdaq. Year to date, the stock is down over 12%, while the Nasdaq is less than 27% higher. Shares hit an all-time high of $1,110.09 back in July. That is higher than the mean price target of $976.04, which signals about 49% upside in the coming year. Five of seven analysts who cover the stock recommend buying shares, two of them with Strong Buy ratings. Bernstein reiterated its Outperform rating recently.
Hedge funds are bullish on the stock. Institutional investors hold over 21% of the shares, and Capital World Investors and FMR have notable stakes. About 393 million shares, or well less than 1% of the float, are held short.
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