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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Maurice H. Norcott who wrote (33782)	9/13/2021 1:44:45 PM
From: Elroy	Respond to of 34328

Yup, SIMO seems like it could be a pretty good pick over the next 18 months. The main problem with SIMO is like Rodney Dangerfield, it gets no respect. So they're putting up phenomenal growth numbers, and still trading at something like 10x (or less) 2022 EPS forecasts. Hopefully they'll deliver their strong growth promises, and maybe, just maybe, the market will believe that their growth is sustainable and grant them a higher PE. I'm pretty sure the dividend (currently 35 cents per Q) is going to 50 cents (or more) per Q in Q4 2021. They announce the "new" annual dividend in late October each year, and we're likely to get a nice bump this year and next. And I think there's a good chance their gross margins (usually fluctuating around 50%) begin to march up toward a permanently higher level in 2022. Higher gross margins means higher end technology, and higher end technology gets a higher PE. So hopefully SIMO delivers a much larger dividend, higher profitability, strong revenue growth, and then the shares get some (well deserved) multiple expansion. The negative concern with SIMO is always that the NAND makers will make their own controller, and use that rather than buy from SIMO. It's hard to make that concern go away (and thus the low PE multiple), but for 2021 and 2022 the trend is in the opposite direction, with SIMO taking share from internal controller groups at NAND makers. The trend could reverse, or it could accelerate, who knows?