Dividends4Life: Intel Corporation (INTC) Is Back as a Dividend Raiser: What to Expect Next

Intel Corporation (INTC) – the world’s largest maker of semiconductors — finally rejoined the ranks of dividend raisers after a long hiatus. Starting in the first quarter of 2015, INTC will pay a 24-cent quarterly dividend, up from the 22.5-cent dividend it has paid since August of 2012. This represents a 7% bump. That’s not too shabby, but as a longtime holder of Intel stock, I’m expecting to see more in the quarters ahead. Nine consecutive quarters without a dividend hike was a long stretch for investors in Intel stock. To find a longer streak, you’d have to go back to the late 1990s and early 2000s when Intel stock was still a sexy growth story and the darling of both Wall Street and Silicon Valley.

Today, we see a very different Intel: more mature, more shareholder friendly, and — most importantly — far more reasonably priced. Let’s dig deeper. For most of the past two years, no one wanted to own Intel stock. It was yesterday’s news, a stodgy, old technology company that had missed the mobile revolution and hitched its wagon to a crippled horse: The Microsoft Corporation (MSFT)-dominated PC market. Had you bought Intel stock 10 years ago, you’d be enjoying an eye-popping yield on cost of 12.9% after a decade of 17.7% annualized growth. Do I expect Intel stock to enjoy that kind of dividend growth over the next five or 10 years? Realistically, no. Intel started at a much lower base 10 years ago, and 17.7% annualized growth would be a stretch. That said, I do believe that annual dividend growth of 7%-10% is very likely.

Source: InvestorPlace

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