United Microelectronics (NYSE:UMC) Trading Down 6.1% - Should You Sell?

Key Points

• United Microelectronics shares fell 6.1% on Friday, trading below the prior close amid lighter-than-average volume.
• Analyst sentiment remains weak: the stock has a consensus rating of “Strong Sell” with an average price target of $8.60, and several firms recently reiterated or downgraded their views.
• The company reported better-than-expected quarterly EPS of $0.20, and it also increased its annual dividend to $0.4122 per share from $0.37, signaling continued shareholder returns despite the stock’s recent drop.

United Microelectronics Corporation (NYSE:UMC - Get Free Report) traded down 6.1% on Friday . The company traded as low as $20.16 and last traded at $20.9240. 9,201,210 shares traded hands during trading, a decline of 33% from the average daily volume of 13,649,759 shares. The stock had previously closed at $22.29.

Analysts Set New Price Targets

Several equities analysts recently issued reports on the stock. BNP Paribas Exane reissued an "underperform" rating on shares of United Microelectronics in a report on Thursday, May 28th. Wall Street Zen lowered shares of United Microelectronics from a "buy" rating to a "hold" rating in a report on Sunday, July 12th. Finally, Weiss Ratings reissued a "hold (c)" rating on shares of United Microelectronics in a report on Tuesday, May 26th. One research analyst has rated the stock with a Hold rating and three have assigned a Sell rating to the company's stock. According to MarketBeat.com, the stock has a consensus rating of "Strong Sell" and an average price target of $8.60.

United Microelectronics Price Performance

The stock has a fifty day moving average of $21.96 and a 200-day moving average of $14.26. The firm has a market capitalization of $54.29 billion, a P/E ratio of 33.22, a PEG ratio of 2.93 and a beta of 1.58. The company has a quick ratio of 2.23, a current ratio of 2.72 and a debt-to-equity ratio of 0.12.

United Microelectronics (NYSE:UMC - Get Free Report) last issued its quarterly earnings data on Wednesday, April 29th. The semiconductor company reported $0.20 EPS for the quarter, topping analysts' consensus estimates of $0.12 by $0.08. United Microelectronics had a net margin of 20.71% and a return on equity of 13.67%. The firm had revenue of $1.91 billion for the quarter, compared to analyst estimates of $1.92 billion. Equities analysts predict that United Microelectronics Corporation will post 0.7 EPS for the current fiscal year.

United Microelectronics Increases Dividend

The company also recently disclosed an annual dividend, which will be paid on Thursday, August 6th. Shareholders of record on Wednesday, July 8th will be issued a dividend of $0.4122 per share. The ex-dividend date of this dividend is Wednesday, July 8th. This represents a yield of 166.0%. This is a positive change from United Microelectronics's previous annual dividend of $0.37. United Microelectronics's dividend payout ratio (DPR) is currently 49.23%.

Hedge Funds Weigh In On United Microelectronics

Several hedge funds have recently added to or reduced their stakes in the company. CoreCap Advisors LLC lifted its position in United Microelectronics by 271.0% during the 2nd quarter. CoreCap Advisors LLC now owns 1,369 shares of the semiconductor company's stock valued at $37,000 after purchasing an additional 1,000 shares during the period. Strategic Investment Solutions Inc. IL bought a new stake in shares of United Microelectronics during the second quarter worth approximately $76,000. Smartleaf Asset Management LLC acquired a new position in United Microelectronics in the second quarter valued at approximately $27,000. TD Private Client Wealth LLC bought a new position in United Microelectronics in the fourth quarter valued at approximately $32,000. Finally, Kestra Advisory Services LLC acquired a new stake in United Microelectronics during the 4th quarter worth $52,000. Institutional investors own 5.05% of the company's stock.

About United Microelectronics

United Microelectronics Corporation (UMC) is a Taiwan-based semiconductor foundry that provides wafer fabrication and related manufacturing services to a global customer base. Founded in 1980, the company operates as a pure-play foundry, producing integrated circuits for a range of customers including fabless semiconductor companies and integrated device manufacturers. UMC is publicly listed NYSE: UMC and focuses on high-reliability manufacturing rather than branding consumer products.

UMC's core services encompass wafer fabrication using a portfolio of process technologies, with particular emphasis on mature and specialty nodes that support analog, power-management, radio-frequency (RF), and mixed-signal applications.

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