Key Takeaways
KLA Corporation (NASDAQ: KLAC) announced a 10-for-1 forward stock split and a 21% dividend increase after a year in which its stock price climbed 163.2 percent, fueled by demand for semiconductor manufacturing equipment.
"Our recent capital return actions, including the 17th consecutive annual dividend increase and an additional $7 billion stock repurchase authorization, underscore our confidence in KLA's durable value creation," CEO Rick Wallace said, connecting the moves to the company's long-term financial outlook.
The semiconductor equipment maker will give shareholders of record as of June 4, 2026, nine additional shares for each share they hold. The stock will begin trading on a split-adjusted basis on June 12. The company also raised its quarterly dividend to $2.30 per share, payable on June 2 to shareholders of record on May 18. The move follows a fiscal third-quarter report where KLA posted non-GAAP EPS of $9.40, beating estimates by $0.25, on revenue of $3.42 billion.
For investors, the stock split is a cosmetic change that will lower the share price from around $1,845 to $184, potentially increasing accessibility for retail buyers. The more significant signal is the sustained dividend growth, which is backed by strong cash flow and a bullish outlook for the AI-driven semiconductor capital equipment cycle.
The 21% dividend increase extends KLA's streak of annual payout raises to 17 years, a track record that spans multiple semiconductor cycles. The quarterly dividend has grown from just $0.12 in 2005 to the new rate of $2.30. This commitment to returning capital is supported by robust financials. On a trailing 12-month basis, KLA generated $4.38 billion in free cash flow.
The company's confidence is also reflected in its fourth-quarter guidance, which projects revenue of $3.575 billion and non-GAAP EPS of $9.87 at the midpoint. The board paired the dividend hike with a new $7 billion stock repurchase authorization, further signaling its belief that the shares are a good investment.
KLA's decision comes as other high-priced stocks are being watched for potential splits. Booking Holdings (BKNG) recently completed a 25-to-1 split. While names like Markel (MKL), with a share price near $1,860, and Goldman Sachs (GS) at $929, are often cited, their corporate cultures make splits less likely. In contrast, tech companies like SanDisk (SNDK), which has seen its stock soar over 3,400% in the past year, are considered more probable candidates to use splits as a tool to engage with a broader investor base.
The dividend increase is the more substantial event for long-term investors, confirming KLA's strong operational performance and capacity to generate cash. The upcoming split-adjusted trading in June will be the next event for the market to watch, followed by the company's fiscal fourth-quarter earnings report.
This article is for informational purposes only and does not constitute investment advice.
