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Monolithic Power Hikes Dividend 20% After Strong Q4 Results

Monolithic Power Systems Inc. (MPWR) is a leading semiconductor company that designs, develops and markets high-performance power solutions. The company’s core strengths include deep system-level and application knowledge, strong analog design expertise and innovative proprietary process technologies.

The company generated 30% of its revenue from Computing and Storage, 26% from Consumer, 17% from Communications, 14% from Industrial and 13% from Automotive in 2020. In terms of geographic diversification, the company’s three largest markets by revenue included China (61%), Taiwan (13%) and Europe (7%) with a total of seven significant markets.

Strong Q4 Financial Results

Monolithic Power Systems reported fourth quarter revenue that rose 39.8% to $233 million, beating consensus estimates by $7.25 million, with non-GAAP earnings of $1.31 per share, beating consensus estimates by seven cents. The growth was driven by ongoing execution of the company’s strategy and a broader rebound from COVID-19 disruptions.

Analysts responded favorably to the strong fourth quarter financial results. For example, Loop Capital’s David Williams noted the company’s continued momentum across business lines, particularly in Automotive, along with its share gains and content growth story, which is “unquestionably intact” and accelerating at an “impressive pace”.

The company raised its quarterly dividend by 20% to $0.60 per share, which represents a 0.71% forward yield. The dividend is payable on April 15, 2021, to shareholders on record as of March 31, 2021.

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