Skyworks Solutions is worth a look at these prices

Skyworks Solutions (NASDAQ: SWKS) is an undercover and undervalued asset working in the semiconductor industry. The company does not manufacture or market semiconductors, but manufactures a wide range of semiconductor-based components for business and industry across all verticals. In this regard, it is well positioned as an intermediary between the semiconductor industry and the rest of the manufacturing world and the results prove it. Not only is the company growing, but it is steering strongly and increasing its dividend, which should help support prices over the long term.

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Skyworks Leverages Diverse Business Model

Skyworks had a very strong third quarter thanks to the company's diversified approach and demand in end markets. The company reported net revenue of $1.23 billion, a 10.8% gain from a year ago, in line with analyst consensus. The gains were driven by notable gains in Wi-Fi and 5G and were also compounded by the strength of the electric vehicle market.

"It is important to note that our growing scope of content in automotive, data center, infrastructure and other diverse sectors is generating strong momentum heading into the second half of calendar year 2022. Leveraging a wide range of premium products, our engagements with the industry's most influential customers benefit from unparalleled connectivity spanning an ever-expanding set of applications and markets,” said Liam K. Griffin, President -general manager.

Downgrading to margin, the company reported a margin contraction that was compounded by increased R&D and SG&A spending that left GAAP and adjusted earnings down on a year-over-year basis. The conclusion, however, is that the margin was stronger than expected and generated $2.44 in GAAP earnings, which is $0.09 better than expected. Although the decline in margin is a concern, cash flow remains strong and the outlook is favourable, so there is no concern over the dividend. Looking ahead, the company expects a sequential double-digit increase in revenue and earnings, which would bring Adjusted EPS to over $2.90, up 12% year-on-year. /p> Skyworks Solutions offers deep discount for income investors

Income investors seeking exposure to technology and semiconductors could do much worse than Skyworks Solutions. While there are stocks in the world of semiconductor applications that trade at similar discounts like Micron Technologies (NASDAQ:MU), or those that pay dividends like Marvell (NASDAQ:MRVL), stocks market have no yield (if any at all). ) and yielding ones do not offer the same value (and often have lower yields). Skyworks Solutions trades at around 10x earnings, which is high compared to Micron Technologies, but Micron is paying less than 1% and, while high-yielding Broadcom (NASDAQ:AVGO) is paying nearly 3.0 %, it trades at a premium of 50% and the payout comes with much less security. The bottom line is that Skyworks is among the best value for money combinations in the semiconductor industry.

The Technical Outlook: Skyworks Solutions Hit Bottom

Skyworks Solutions' price action bottomed out prior to the Q3 release and has since rebounded. The price action is up almost 30% during this time and could easily rise if the market follows the signal. The next hurdle for the price will be near $117.50 and the 150-day moving average. If this level can be broken above, a move towards the $140-$150 range is expected. Otherwise, this stock may be limited to current levels until there is more clarity on economic activity in 2023.