I hate to say I told you so but Intel (INTC) had a great week of gains. I believe the gains have only started and look for $40 a share within a year. Thanks for reading and good luck at the tables. Tony
I hope all my readers took my advice on Intel. Hope you all bought in the low $20 a share range when I was first posting about buying it. I believe the stock still has a Long way to go on the upside. Collect the now 3%, soon to be raised Dividend, and hold for the long haul. IMHO. Good luck investing. Tony
Now that semiconductor giant Intel (NASDAQ: INTC)
has raised its guidance for this year, the next step management can
take to enhance shareholder value would be to increase the dividend.
Intel hasn't given investors a dividend raise in nearly two years.
Indeed, there was good reason for this. Intel is still reliant on the
personal computer, and has struggled to get its chips into tablets and
other mobile devices. In an increasingly mobile world, there were
rampant fears that the personal computer would go the way of the buggy
As a result, it's understandable that Intel needed to save as much
cash as it could to invest in new technologies. Apparently, Intel is
finally seeing enough progress on these measures to announce it will
likely return to revenue growth this year. And, assuming margins expand
as anticipated, profits will grow as well.
But Intel isn't the only company going through this. Hewlett-Packard Company (NYSE: HPQ)
is in the middle of its own turnaround. HP is busily investing in new
markets and product categories, but that hasn't stopped it from
increasing its dividend several times over the past few years.
With the dark storm clouds no longer hanging over Intel's head, it's time to reward loyal shareholders with a dividend increase. All eyes on the payout Intel hasn't raised its
dividend in quite some time, but it didn't have to. With so many
concerns about the state of its business and its declining profits,
Intel's stock price was stuck in the doldrums. That kept Intel's
dividend yield fairly high, since a stock price and dividend yield are
inversely related. The stock was already a high-yielder, especially for
Plainly stated, there wasn't much urgency for Intel management to
raise its dividend when it yielded nearly 4%. But now that Intel's share
price has recovered and sits at $30 per share, a level not seen in a
decade. In turn, its yield is back down to 3%.
Nevertheless, Intel's lack of a dividend raise is a curious decision.
It's certainly true that the uncertainties in the rapidly evolving
world of technology are cause for conservatism. But Intel is still
highly profitable, with little debt on the balance sheet to worry about
and a comfortable payout ratio. And, Intel holds $10 billion in cash and
short-term securities, which in all likelihood isn't earning anything
Intel generated $1.89 in earnings per share last year. Its $0.90 per
share dividend equates to just a 47% payout ratio, which is already a
very modest level. And, now that Intel expects revenue growth and margin
expansion this year, it stands to reason the payout ratio will drop
going forward as earnings per share likely increase.
Equally confusing is that Intel's PC peer HP hasn't held back its
dividend increases. HP has had its own fair share of PC-related
headaches. It's seen first-hand the effects of a huge and mature company
struggling to break the chains of old technology. To that end, HP's
revenue is down 1% over the past six months, which makes it clear the
company still has a ways to go before its turnaround is complete.
But that hasn't stopped HP from raising its dividend along the way.
Since Intel announced its last dividend increase, HP has upped its own
payout three times, including the most recent 10% bump. Show shareholders the money, Intel Intel once
held the reputation of a dividend growth stalwart. Until 2012, the
company had raised its payout every year for a decade. That all came to a
halt, however, when the mobile revolution caught Intel completely off
Since then, Intel has plowed most of its cash flow into new product
categories. Fortunately, there are finally glimmers of hope that these
investments will pay off. After a few years of stagnant results, Intel
expects revenue growth and margin expansion this year.
Assuming it hits its projections, there's no reason why Intel can't
raise its dividends. It maintains a conservative payout ratio and holds a
rock-solid balance sheet stuffed with cash. Loyal shareholders have
stuck with Intel through thick and thin. It's now time to reward them
with a dividend increase.
What have been telling you all about Intel (INTC) for the last 2 years? I kept saying buy it with a price target of $30 within 2 years! Well I was right and I still say buy it at these levels. We should see $40 a share within the next year and a half. The Windows XP replacement cycle is just starting to heat up. Intel will be the biggest beneficiary of it, especially from their business customers. Look for a Dividend raise this year too. Thanks for reading and good luck investing. Tony
It looks like a short term correction may finally be upon us in the Stock Market. If Intel goes down 5% from the top back up the truck and buy some more! These days they are making all the right moves. If you have been listening to me you have been reaping the rewards. No reason for it to stop now. Thanks for reading and good luck investing. Tony
I feel this stock is getting ready for a breakout to the upside. It has been stuck in a $7.50-$8.50 range for all of 2014 so far. Once it breaks past $8.50 I see $10 a share right around the corner. Plus I love the whole long term turn around play for the company. $20 a share and a higher dividend within the next 2 years are highly likely. Thanks for reading and good luck investing. Tony