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Technology Stocks : Silicon Motion Inc. (SIMO)
SIMO 101.26+0.9%2:45 PM EDT
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From: Elroy10/26/2025 2:10:44 PM
1 Recommendation

Recommended By
Lance Bredvold

   of 2957
 
SIMO should announce the dividend amount for the next four quarter this coming Monday or Tuesday before the market opens. What will the amount be?

Keep this mind. For the past few years SIMO has been spending Cap Ex each year to construct the new office building. The building is complete, and thus this construction Cap Ex spending is finished.

Over the previous 12 quarters SIMO spend the following amounts on construction Cap Ex:

Four quarters ending Q2 2025 = $21.4m

Four quarters ending Q2 2024 = $28.3m

Four quarters ending Q2 2023 = $21.4m

Going forward construction Cap Ex is over, so that $24m per year previous expense will go to the free cash flow line. Nice!
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Since SIMO’s sales (and profits) are expected to increase dramatically, AND SIMO will no longer need to spend about $24m per year on office building construction, a dividend bump from the current $2.00 per year to $3.00 per year seems quite reasonable. A one dollar per year dividend increase would cost SIMO about $34m per year. About $24m of that increase comes from just not spending on new building construction, so the additional requirement to pay $3.00 per year is only an extra $10m PER YEAR.

Hmmm. Hopefully we get a nice dividend bump this week…..
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