Cypress’s cash flows
Cypress Semiconductor (CY) has a strong cash flow structure, and thus, it rewards its shareholders with regular dividends. Cypress has recently accepted a buyout offer of $23.85 per share from German chipmaker Infineon. The $10 billion deal, including debt, is expected to be completed at the end of 2019 or early 2020. Cypress is expected to continue to pay dividends until the deal is closed.
At the end of Q1 2019, Cypress’s cash flow from operations was $61.2 million, higher than the $31.7 million in cash flows in the year-ago quarter. Free cash flows were $50.7 million in Q1 2019, up from $14.7 million in the year-ago period. The company’s total debt was $909.5 million in Q1 2019, down from over $1 billion of debt in the year-ago quarter.
In the first quarter, Cypress spent around $39.7 million and paid a dividend of $0.11 per share to shareholders. The quarterly dividend of $0.11 is equivalent to an annual dividend of $0.44 per share, which would mean a payout ratio of 41.5%.
Cypress’s dividend yield was 1.99% as of June 3. In comparison, semiconductor peers including Intel (INTC), Qualcomm (QCOM), Broadcom (AVGO), and NVIDIA (NVDA) carry dividend yields of 2.9%, 3.72%, 4.19%, and 0.48%, respectively, as of June 3.