An In-depth Look at Intel Corp's Dividend Performance and Sustainability
Intel Corp (INTC, Financial) recently announced a dividend of $0.13 per share, payable on 2023-12-01, with the ex-dividend date set for 2023-11-06. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into Intel Corp's dividend performance and assess its sustainability.
What Does Intel Corp Do?
Intel Corp is a premier digital chipmaker, focused on the design and manufacturing of microprocessors for the global personal computer and data center markets. Intel pioneered the x86 architecture for microprocessors and was the primary proponent of Moore's law for advances in semiconductor manufacturing. The company holds the market share leadership in central processing units in both the PC and server end markets. Intel is also expanding into new adjacencies, including communications infrastructure, automotive, and the Internet of Things. Furthermore, Intel aims to leverage its chip manufacturing capabilities into an outsourced foundry model where it constructs chips for others.
A Glimpse at Intel Corp's Dividend History
Intel Corp has maintained a consistent dividend payment record since 1992, with dividends currently distributed on a quarterly basis. Notably, Intel Corp has increased its dividend each year since 1992, earning it the reputation of a dividend aristocrat. The chart below showcases the annual Dividends Per Share for tracking historical trends.
Breaking Down Intel Corp's Dividend Yield and Growth
As of today, Intel Corp currently has a 12-month trailing dividend yield of 2.57% and a 12-month forward dividend yield of 1.31%, indicating an expectation of decreasing dividend payments over the next 12 months. Over the past three years, Intel Corp's annual dividend growth rate was 5.00%. Extended to a five-year horizon, this rate increased to 5.90% per year. Over the past decade, Intel Corp's annual dividends per share growth rate stands at 5.80%. Based on Intel Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Intel Corp stock as of today is approximately 3.42%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Intel Corp's dividend payout ratio is 0.00. Intel Corp's profitability rank is 8 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
Intel Corp's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Intel Corp's revenue has increased by approximately -1.70% per year on average, a rate that underperforms than approximately 79.38% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Intel Corp's earnings increased by approximately -28.20% per year on average, a rate that underperforms than approximately 89.73% of global competitors. Lastly, the company's 5-year EBITDA growth rate of -7.40% underperforms than approximately 89.59% of global competitors.
Next Steps
In conclusion, Intel Corp's consistent dividend payment record, coupled with its strong profitability rank, makes it a viable option for value investors seeking steady returns. However, the company's underperformance in growth metrics compared to global competitors and the expected decrease in dividend payments over the next 12 months warrant careful consideration. Therefore, potential investors should conduct thorough due diligence before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
