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Microchip Technology Incorporated (NASDAQ:MCHP) is included among the 15 Dividend Growth Stocks with the Highest Growth Rates.
Microchip Technology Incorporated (NASDAQ:MCHP) designs and produces microcontrollers, analog chips, FPGAs (field-programmable gate arrays), and various supporting semiconductor products used across a wide range of industries. The company’s largest exposure lies in the industrial machinery market, which accounts for about 43% of its revenue, followed by the automotive sector at 18%, bringing total exposure to these two segments to roughly 61%.
Microchip Technology Incorporated (NASDAQ:MCHP) entered fiscal 2026 on a strong note, with revenue rising 10.8% sequentially to around $1.08 billion, surpassing its revised guidance. As part of its ongoing recovery efforts, the company achieved a meaningful reduction in inventory during the June quarter, cutting total inventory by $124.4 million. Distribution inventory days fell by four to 29 days, while balance sheet inventory days declined to 214, reflecting improved working capital management. These advancements in inventory optimization highlight the success of its manufacturing initiatives and have strengthened the company’s operational flexibility as market demand continues to recover.
Microchip Technology Incorporated (NASDAQ:MCHP)’s cash position also remained stable during the quarter. The company reported an operating cash flow of $275.6 million, and its free cash flow came in at $257.7 million. It also returned $245.5 million to shareholders during the quarter through dividends.
Microchip Technology Incorporated (NASDAQ:MCHP) has outlined a goal to return all of its adjusted free cash flow to shareholders, highlighting its focus on long-term value creation. The company initiated its dividend program on December 6, 2002, and has maintained a strong record of shareholder returns ever since. Supported by solid cash flow generation and a disciplined approach to capital allocation, the company has delivered dividends for 92 consecutive quarters, reinforcing its commitment to rewarding long-term investors. In addition, Microchip has raised its dividends 83 times during this period. The company currently offers a quarterly dividend of $0.455 per share and has a dividend yield of 2.94%, as of October 30.
While we acknowledge the potential of MCHP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 13 Most Undervalued Dividend Stocks to Buy According to Wall Street Analysts and 11 Best FTSE Dividend Stocks to Buy Right Now.
Disclosure: None.
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