Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a true Dividend Rock Star: it has returned investors an average of 3.78% annual for the past 10 years. Taiwan Semiconductor Manufacturing Company Limited engages in the computer-aided design, manufacture, packaging, testing, sale, and marketing of integrated circuits, color filters, and other semiconductor devices and has a market cap of $162.20 Billion.
What is a Dividend Rock Star?
It is a stock that pays a consistent, reliable and competitive dividend and one that can expected to continue paying for years to come. View our latest analysis for Taiwan Semiconductor Manufacturing
High yield and dependable
The 3.67% yield which is high for a semiconductors stock. . But the real reason Taiwan Semiconductor Manufacturing stands out is because it has a high chance of being able to continue to pay this for years to come, something that is quite desirable if you are looking to create an income portfolio.
I like dividend stocks which haven’t dropped a payment in the past 10 years, or at least don’t have any significant blips.For examples companies like Coca-Cola (NYSE:KO), Procter & Gamble (NYSE:PG), and Lowe’s (NYSE:LOW) who have all been increasing their dividend payments for over 50 years.
Reliablity is an important factor for dividend stocks. In the case of TSM they have increased their DPS from TWD2.39 to TWD7 in the past 11 years. They have also been paying out consistently during this time, as one would expect if dividends were increasing.
Taiwan Semiconductor Manufacturing has a payout ratio of 47%, meaning the dividend is sufficiently covered by earnings. Looking forward 3 years the analysts expect the dividends per share be around TWD9.117 and EPS to increase to TWD16.88. This means they should be able to continue to afford to pay with estimated future payout ratio of 54%.
It doesn’t get much better
There aren’t many other stocks out there with the same track record as Taiwan Semiconductor Manufacturing, I would certainly say it is worth considering if dividend stocks are your thing. I also recommend taking time to understand their core business.
No matter how great a company is, it is not worth an infite price. Is Taiwan Semiconductor Manufacturing overvalued or is it actually available for a good price? I recommend you check our latest FREE analysis to find out! Don’t like TSM? Take a look at my list of Dividend Rock Stars.