PIF Halal Dividend Portfolio – Q1 2022

PIF Halal Dividend Portfolio – Q1 2022

The Q4 2021 PIF Halal Dividend Portfolio had a 10.22% return not including dividends and their reinvestment returns.

Recently we updated the PIF Halal Dividend Stock Portfolio to accommodate our most recent outlooks.

Of the various changes we made to the portfolio, we added the following stock…

Micron Technology (MU)

Micron is an American producer of computer memory and data storage solutions headquartered in Boise, Idaho.

It is a large company with a market cap that is currently north of 100 billion U.S. dollars and more than 40,000 employees.

It currently has a dividend yield of close to 0.4%. 

Granted, that’s only 0.4% from not paying a dividend at all.

I will also admit Micron isn’t exactly a tried and true dividend paying company. 2021 was the first time they paid dividends since 1996.

However, their dividend payout ratio is tiny too. Just 2.26%. So they’re basically just paying zakat.

I have a hunch that given this small payout ratio and with the recent success this company has experienced, there is a non-trivial chance that Micron’s dividend will be increased.

Micron currently sits on nearly 10 billion in cash and a low level of debt with a debt to equity ratio of around 16%.

The fact that they decided to pay dividends in 2021 for the first time in a long time seems to suggest strong management confidence in the financial position and future prospects of the company.

Regarding Micron’s Comfort Level

The main concern to me was where Micron’s factories were located. 

I was able to find that they have a factory in Xi’an china, not to be confused with Xinjiang province in China where the notorious crackdown on Uyghur muslims is happening. 

Most Micron factories are in the U.S., Singapore and Japan.

I couldn’t find any indication that labor violations or human rights abuses had occurred in the Micron China facility or that a suggestion of such violations was made by anyone.

It’s never really easy to verify these things in China but it appears that Micron’s facility in China is insha’ Allah clean.

Micron’s Outlook

Qualitatively, the prospects of Micron’s business look rather bright.

2022 first-quarter results were released showing that its revenue, earnings, and guidance exceeded Wall Street’s expectations. 

Micron’s revenue shot up 33% year-over-year to $7.69 billion, while net income jumped 187% since just 1 year ago. 

One of the reasons behind Micron’s impressive growth last quarter was the jump in the company’s revenue from the sale of Micron’s DRAM and flash storage products.

Micron Management estimates 5G smartphones are using 50% more DRAM to enable faster processing compared to 4G devices. Meanwhile, the amount of flash storage in 5G smartphones has doubled in comparison to 4G smartphones.

Micron estimates that 700 million 5G smartphones could be shipped in 2022, up significantly from 2021’s shipments of 500 million units. By 2025, annual 5G smartphone shipments are expected to reach 1.5 billion units highlighting the massive growth opportunity for Micron’s mobile related revenue.

As always, this was not investment advice, make sure to do your own due diligence before making any investment decisions.

If you’d like to purchase access to the Q1-2022 PIF Halal Dividend Stocks Portfolio, you can do so HERE.

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