Don’t Whiff on This Income Chip Shot

One of the joys of investing in growth companies that pay a dividend is that their dividend tends to grow as well. On that note, this is a reminder that today is the last day to buy portfolio recommendation Taiwan Semiconductor Manufacturing (TSM) if you’d like to become a shareholder of record by June 28, and the recipient of Taiwan Semi’s annual dividend on July 20.

Last year, Taiwan Semi paid out 75 cents per American Depositary Receipt, as shares traded in the U.S. are known. That was net of the 20% Taiwan withholding tax on overseas dividend payments. After a banner 2016, Taiwan Semi will pay out almost 93 cents per share next month, also net of Taiwan tax withholding. That’s an annual dividend increase of 24%.  

I don’t think it’s ever worth it to buy something just to land the next dividend. You should buy Taiwan Semi because it’s the dominant microchip foundry with huge margins and daunting barriers to entry for competitors. And of course the dividend doesn’t hurt either.


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