Maxim Integrated Products - Growth & Income

Maxim Integrated Products’ (MXIM) demand is so strong that the company is going to increase capacity. That should set the stage for strong revenue and earnings growth for the next year or two.

Growth and Income

The company is expected to grow its earnings per share 44.0% in fiscal 2011, 14.8% in fiscal 2012, and 12.5% over the long term. Its trailing 12-month return on equity is 12.4%. The stock also offers investors a juicy dividend yield of 4.6%.

This Zacks #2 Rank stock trades at just 12.1x fiscal 2011 consensus EPS estimates and 10.5x fiscal 2012 consensus EPS estimates.

Business

Maxim Integrated Products designs, develops, manufactures, and markets various linear and mixed-signal integrated circuits/analog circuits worldwide.

Recent News

On July 29, Maxim had net revenue of $566.0 million for its fiscal 2010 fourth quarter, an 11% increase over the year-earlier quarter. The company earned $0.33 per share, beating the Zacks Consensus by 3 cents, or 10.0%.

Tunc Doluca, president and CEO, said, “We are pleased with our results in the June quarter. We achieved record revenues as a result of the improved economy and our innovative products winning significant designs this past year. To support this growing demand, we are on plan to increase flexible wafer fab capacity.”

Looking ahead to the first quarter of fiscal 2011, the company expects revenue of $600 million to $630 million and EPS of $0.36-$0.40.

Estimates

In the last week, the Zacks Consensus Estimate for fiscal 2011 is up 8 cents, or 5.9%, to $1.44, and the Zacks Consensus Estimate for fiscal 2012 is up 7 cents, or 4.4%, to $1.66.

The Chart

MXIM shares are flat over the last twelve months. Since late April, the stock is down a little more than 17%. It is still struggling to get above its 200-day moving average. The stock appears to have decent support around the $17 level with resistance in the $20-$21 level.