S Daily Stock Analysis: United Microelectronics Corp.

United Microelectronics Corp., known by the ticker symbol UMC, is a large cap semiconductor maker in the technology business sector. This is my first report on UMC for my Viital stock portfolio. I last reviewed UMC seven months ago, May 20th when I selected it for my Vista (the sixth) stock portfolio over the past seven years.

United Microelectronics Corp. is the world's third-largest dedicated chip foundry, with a 7% market share in 2020 according to Gartner after TSMC and GlobalFoundries. 

UMC operates 12 fabs in Taiwan, Mainland China, Japan, and Singapore, with additional sales offices in Europe, the U.S., and South Korea. 

macro photography of black circuit board
Image Source: Unsplash

UMC features a diverse customer base including Texas Instruments, MediaTek, Qualcomm, Broadcom, Xilinx, and Realtek, supplying a wide range of products applied in communications, display, memory, automotive, and more. 

UMC employs about 20,000 people.

Company headquarters are in Hsinchu, Taiwan, and it was Incorporated in 1980

Three key data points gauge any dividend equity or fund such as United Microelectronics Corp. (UMC):

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money. 

UMC Price

United Microelectronics Corp.'s price per share was $12.14 as of yesterday's market close. One year ago its price was $8.97. Thus, UMC's share price grew over 35% in the past year.

If United Microelectronics Corp. stock trades in the range of $8.00 to $15.00 this next year, its recent $12.14 share price could rise by $1.66 to reach $13.80 by December 3, 2022. My estimate is $0.03 above the median of the estimates from three analysts who cover United Microelectronics Corp. for their brokerage firms.

UMC Dividends

United's most recent annual dividend of  $0.2866 was paid out on August 20th, 2021 to shareholders of record on July 21st. That dividend yields 2.36% per yesterday's $12.14 closing price. 

United Microelectronics Corp. has paid annual dividends increasing generally annually for the past five years.

UMC Returns

Adding the $0.29 annual estimated UMC forward-looking dividend to my $1.66 price upside estimate shows a $1.95 potential gross gain, per share, to be reduced by any costs to trade UMC shares.  

At yesterday's $12.14 price per share, a little under $1000 would buy 82 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at sale and might cost us $0.12 per share.

Subtract that maybe $0.12 brokerage cost from my estimated $1.95 gross gain per share results in a net gain of $1.83 X 82 shares = $150.06 for a 15% net gain on a $995.48  investment.

So it is that United Microelectronics Corp. shows a possible 15% net gain including a 2.36% forward estimated dividend yield. 

Over the next year at this time, a $1000 investment in United Electronics Corp (UMC)  could generate $23.60 in cash dividends alone. Note that a single share of UMC stock bought at yesterday's closing price was $12.14! Thus, United Microelectronics Corp.'s share price is nearly half the dividend income from $1000.00 invested. Thus, according to my dogcatcher ideal, now may be a prime time to pick up United Microelectronics Corp. shares. The estimated next-year dividend from $1k invested is near twice the single share price. Consider yourself alerted. It's a sign!  

All of the estimates above are speculation based on the past history of United Microelectronics Corp. Only time and money invested in this stock will determine its market value.

Disclaimer:  This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...

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