Is Intel a Top Dividend Stock?
Intel Corporation (NASDAQ:INTC) is a household name. If you are reading this article on a desktop or laptop, there is a good chance that you will find Intel’s products inside your device. The company has been around for nearly half a century and is one of the biggest chipmakers in the world. The thing is, though, the technology sector is not really known for producing solid dividend payers. Should dividend investors make an exception for INTC stock? In this article, we are going to take a look at Intel stock’s dividend history, dividend dates, yield, and everything else you need to know about the tech giant from an income investor’s perspective.
In 1968, Gordon E. Moore, a chemist, and Robert Noyce, a physicist and co-inventor of the integrated circuit, founded Intel in Mountain View, California. Unlike those typical Silicon Valley stories, the company did not start out of some 20-year-old founder’s garage. Moore and Noyce were experienced engineers, and thanks to venture capitalist Arthur Rock, they were able to secure $2.5 million in initial funding.
Memory chips were Intel’s very first products. In 1969, the company produced the first commercial metal oxide semiconductor chip, the 256-bit “1101.” The 1101 didn’t sell that well, but its sibling product–the “1103,” introduced in 1970–was a big success. Intel had many achievements as a young company, including creating the first commercially available microprocessor in 1971 and one of the first microcomputers in 1972.
In the 1970s, the majority of Intel’s business was making dynamic random access memory (DRAM) chips. Then, in 1981, IBM introduced the first mass-produced personal computer (PC) powered by Intel’s 16-bit “8088” microprocessor, and the PC market started to grow. Computers have evolved from being expensive and cumbersome instruments with the size of a room to portable devices that many people can’t live without. With the boom of the PC market, Intel was able to grow its business exponentially.
Intel completed its initial public offering (IPO) in 1971 with a price of $23.50 per share. The IPO raised $6.8 million for the company. Today, it is a multinational technology conglomorate commanding nearly $170 billion of market cap. Here is everything you need to know about Intel stock from an income investor’s perspective.
- Intel Stock Price History
- INTC Stock Dividend Data
- Intel Stock Dividend History
- Intel Stock Dividend Per Share
- Intel Stock Current Dividend Policy
- When Is Intel’s Ex-Dividend Date?
- Will Intel Raise Its Dividend?
- What to Expect from Intel in 2017
- Intel Stock Dividend Reinvestment Plan (DRIP)
- Intel Stock Split History
- Will INTC Stock Split in 2017?
- Final Thoughts on Intel Stock Dividends
#1. Intel Stock Price History
Source: StockCharts.com
Intel stock climbed steadily in its early days. Then, as you can see from the stock chart, the company’s share price really started picking up momentum in the late 1990s. And it’s not really a surprise; in a time when some companies with no revenue can see their stock price skyrocket after IPO, money was pouring into Intel stock.
The dot-com bubble grew so fast that from 1995 to 2000, the NASDAQ Composite surged more than 570%. By year 2000, Intel was one of the biggest companies on the planet, commanding over $500.0 billion of market cap at one point.
But then, the dot-com bubble burst. The NASDAQ plunged a whopping 78% in less than three years since its peak in March 2000, wiping out trillions of dollars of investor wealth. Unsurprisingly, Intel stock tumbled during this period. Moreover, management lowered the company’s forward guidance. As a result, Intel stock plunged more than 80% in less than two years.
Numerous companies disappeared after the dot-com bubble, but the stock market managed to make a comeback. Today, the NASDAQ Composite is at 5,866, which is over 16% higher than its peak in March 2000. Some of the dot-com veterans have also recovered from their huge share price losses. Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL), both founded within a decade of Intel, have made new all-time highs in their share prices.
What about Intel stock? Well, Intel’s products were still selling reasonable well after the bubble burst, and INTC stock has climbed quite a bit since the crash. However, it was never able get even close to its peak. At $35.74 apiece, Intel stock is trading at less than half of what it was in August 2000.
Usually, when we analyze decades-old companies, we notice that long-term investors in many of those businesses have been handsomely rewarded. In Intel’s case, though, due to the dot-com bubble, an investor who bought shares of Intel stock around the year 2000 would still be underwater in that investment. Still, earlier investors in Intel stock would have made huge returns if they held on to their shares to this day, despite that dramatic episode.
So, we know that Intel stock hasn’t been the nicest to investors over the past 20 years. However, that doesn’t mean investors should cross INTC stock of their lists. Right now, there could still be a reason to own the decades-old chipmaker, and that’s the company’s dividends.
#2. INTC Stock Dividend Data
| Dividend Yield | Annualized Payout | Payout Ratio | Dividend Growth |
| 3.05% | $1.09 | 38.2% | 2 Years |
#3. Intel Stock Dividend History
Tech stocks are not really known for their dividends. Companies in this fast-changing industry often have to reinvest a sizable portion of their earnings (if they have any) for future growth. Moreover, dividends are sticky. If a company just had a good quarter but doesn’t know if the performance is sustainable, it will probably think twice before paying a dividend. This is because starting a dividend stream and then stopping it would result in major investor disappointment. If a company doesn’t know if it will be able to pay a dividend in the future, it may use other ways to return value to investors, such as buying back its shares and issuing one-time special dividends.
That’s where Intel stock stands out at the moment. The company not only pays a dividend, but has a decent yield in today’s stock market. Paying $0.2725 per share on a quarterly basis, INTC stock has an annual dividend yield of 3.05%. Note that the average dividend yield of all S&P 500 companies right now is just 1.94%. (Source: “S&P 500 Dividend Yield,” Multpl.com, last accessed April 12, 2017.)
Now, let’s take a look at Intel stock’s dividend history.
Even though the company established its presence in the semiconductor business quite early, it didn’t start paying dividends until 1993. But since then, its track record of dividend increases has been rather impressive.
Don’t get me wrong, Intel is no Johnson & Johnson (NYSE:JNJ), which has increased its payout every year for over five decades. Since it started paying dividends, there were more than a few years where Intel did not raise it. However, the company never slashed its dividends either. Even with lowered expectations after the burst of the dot-com bubble, Intel did not cut back its payout to income investors.
What we have here is a company that has paid either steady or increasing dividends for 24 years. While there are companies with more frequent dividend increases, what Intel has done is truly impressive for a tech company. Some of Intel’s peers in 1993 have gone out of business, and most of those that remained in business can’t match Intel’s dividend history. Indeed, when a lot of tech companies don’t even know if they are going to be around in the next five years, why bother paying a dividend?
The following table shows Intel’s dividend history over the past 10 years.
| Declaration Date | Ex-Dividend Date | Record Date | Payment Date | Amount |
| 2017/03/23 | 2017/05/03 | 2017/05/07 | 2017/06/01 | $0.2725 |
| 2017/01/23 | 2017/02/03 | 2017/02/07 | 2017/03/01 | $0.2600 |
| 2016/09/15 | 2016/11/03 | 2016/11/07 | 2016/12/01 | $0.2600 |
| 2016/07/12 | 2016/08/03 | 2016/08/07 | 2016/09/01 | $0.2600 |
| 2016/03/17 | 2016/05/04 | 2016/05/07 | 2016/06/01 | $0.2600 |
| 2016/01/22 | 2016/02/03 | 2016/02/07 | 2016/03/01 | $0.2600 |
| 2015/09/11 | 2015/11/04 | 2015/11/07 | 2015/12/01 | $0.2400 |
| 2015/07/23 | 2015/08/05 | 2015/08/07 | 2015/09/01 | $0.2400 |
| 2015/03/19 | 2015/05/05 | 2015/05/07 | 2015/06/01 | $0.2400 |
| 2015/01/23 | 2015/02/04 | 2015/02/07 | 2015/03/01 | $0.2400 |
| 2014/09/12 | 2014/11/05 | 2014/11/07 | 2014/12/01 | $0.2250 |
| 2014/07/24 | 2014/08/05 | 2014/08/07 | 2014/09/01 | $0.2250 |
| 2014/03/19 | 2014/05/05 | 2014/05/07 | 2014/06/01 | $0.2250 |
| 2014/01/23 | 2014/02/05 | 2014/02/07 | 2014/03/01 | $0.2250 |
| 2013/09/25 | 2013/11/05 | 2013/11/07 | 2013/12/01 | $0.2250 |
| 2013/07/25 | 2013/08/05 | 2013/08/07 | 2013/09/01 | $0.2250 |
| 2013/03/21 | 2013/05/03 | 2013/05/07 | 2013/06/01 | $0.2250 |
| 2013/01/23 | 2013/02/05 | 2013/02/07 | 2013/03/01 | $0.2250 |
| 2012/09/24 | 2012/11/05 | 2012/11/07 | 2012/12/01 | $0.2250 |
| 2012/07/26 | 2012/08/03 | 2012/08/07 | 2012/09/01 | $0.2250 |
| 2012/03/22 | 2012/05/03 | 2012/05/07 | 2012/06/01 | $0.2100 |
| 2012/01/25 | 2012/02/03 | 2012/02/07 | 2012/03/01 | $0.2100 |
| 2011/09/22 | 2011/11/03 | 2011/11/07 | 2011/12/01 | $0.2100 |
| 2011/07/27 | 2011/08/03 | 2011/08/07 | 2011/09/01 | $0.2100 |
| 2011/03/18 | 2011/05/04 | 2011/05/07 | 2011/06/01 | $0.1812 |
| 2011/01/24 | 2011/02/03 | 2011/02/07 | 2011/03/01 | $0.1812 |
| 2010/09/24 | 2010/11/03 | 2010/11/07 | 2010/12/01 | $0.1575 |
| 2010/07/22 | 2010/08/04 | 2010/08/07 | 2010/09/01 | $0.1575 |
| 2010/03/19 | 2010/05/05 | 2010/05/07 | 2010/06/01 | $0.1575 |
| 2010/01/22 | 2010/02/03 | 2010/02/07 | 2010/03/01 | $0.1575 |
| 2009/09/10 | 2009/11/04 | 2009/11/07 | 2009/12/01 | $0.1400 |
| 2009/07/16 | 2009/08/05 | 2009/08/07 | 2009/09/01 | $0.1400 |
| 2009/03/19 | 2009/05/05 | 2009/05/07 | 2009/06/01 | $0.1400 |
| 2009/01/23 | 2009/02/04 | 2009/02/07 | 2009/03/01 | $0.1400 |
| 2008/09/10 | 2008/11/05 | 2008/11/07 | 2008/12/01 | $0.1400 |
| 2008/07/17 | 2008/08/05 | 2008/08/07 | 2008/09/01 | $0.1400 |
| 2008/03/20 | 2008/05/05 | 2008/05/07 | 2008/06/01 | $0.1400 |
| 2008/01/17 | 2008/02/05 | 2008/02/07 | 2008/03/01 | $0.1275 |
| 2007/09/12 | 2007/11/05 | 2007/11/07 | 2007/12/01 | $0.1125 |
| 2007/07/12 | 2007/08/03 | 2007/08/07 | 2007/09/01 | $0.1125 |
| 2007/03/22 | 2007/05/03 | 2007/05/07 | 2007/06/01 | $0.1125 |
| 2007/01/18 | 2007/02/05 | 2007/02/07 | 2007/03/01 | $0.1125 |
Source: “Intel Corporation Dividend Date & History,” NASDAQ, last accessed April 13, 2017.
As you can see from the table, although Intel isn’t known to be a top dividend stock, its payout growth is nothing short of impressive. Over the past 10 years, the company’s quarterly dividend rate has been raised from $0.1125 per share to $0.2725 per share. In other words, it’s up 142%.
However, what the table also shows is that increases don’t always come when investors expect them. For instance, Intel’s dividend rate stayed the same from 2008 to 2009 and from 2013 to 2014. As a result, Intel stock does not score too many points when it comes to consecutive dividend increases, and is not a “dividend aristocrat.”
#5. Intel Stock Current Dividend Policy
Intel’s latest dividend increase was announced in March 2017, when the company’s board of directors declared a quarterly dividend of $0.2725 per share. That’s an annualized payout of $1.09, representing a five-percent increase from Intel’s previous annual dividend rate. The dividend will be payable on June 1, 2017 to shareholders of record on May 7. (Source: “Intel Declares Quarterly Cash Dividend,” Intel Corporation, March 23, 2017.)
#6. When is Intel’s Ex-Dividend Date?
Investors wishing to collect this dividend should own Intel stock before the ex-dividend date. The ex-dividend date is usually set to be two business days before the record date. In this case, the ex-dividend date for Intel’s next dividend payment is May 3.
#7. Will Intel Raise Its Dividend?
One of the questions many Intel stock investors had earlier this year was, “Will Intel raise its dividend in 2017?” The company provided an answer to that question by announcing a five-percent dividend increase in March. To see whether the chipmaker has the ability to further increase its payout going forward, let’s take a look at how its business is doing.
Intel started it business with just a few products. Today, the company has six operating segments and more than 100,000 employees. Here is a brief description of each of Intel’s segments.
Client Computing Group: This is Intel’s PC segment. It is responsible for making platforms for desktops, laptops, two-in-one systems, tablets, phones, and a variety of other connected products. The Client Computing Group is currently Intel’s biggest segment in terms of revenue.
Data Center Group: Data centers are key to the booming cloud computing industry. Intel’s Data Center Group offers platforms designed for enterprise and cloud communications infrastructure, as well as technical computing segments.
Internet of Things Group: The name says it all. This is Intel’s segment set to capitalize growth in the “Internet of Things” (IoT) industry. It makes platforms for transportation, home use, retail, and other IoT applications.
Non-Volatile Memory Solutions Group: With the adoption of solid state drives in more than computing devices, the demand for NAND flash memory has been increasing. Intel’s Non-Volatile Memory Solutions Group makes NAND flash memory products used in solid state drives.
Intel Security Group: Cyber security is another fast-growing field in tech these days. Intel Security Group includes security software products that help secure computers, mobile devices, and networks.
Programmable Solutions Group: This is Intel’s segment responsible for making programmable semiconductors. As a consumer, you might not have used these products directly, but programmable semiconductors are found in a wide range of industries, such as communications, networking and storage, and automotive.
Intel has been around for nearly five decades, but the company still has some growth drivers. In 2016, Intel’s Internet of Things Group generated $2.6 billion in revenue, representing a 15% increase year-over-year. Revenue from the Data Center Group surged eight percent from 2015 to $17.2 billion, and the Intel Security Group grew its revenue nine percent to $2.2 billion. (Source: “Intel Reports Record Full-Year Revenue Of $59.4 Billion; Reports Record Quarterly Revenue Of $16.4 Billion,” Intel Corporation, January 26, 2017.)
One of the biggest concerns for the Santa Clara, California-based chipmaker is the slowing down in the PC industry. If consumers are not buying as many laptops and desktops as before, how can Intel sell more of its products? On that front, note that last year, revenue from the company’s Client Computing Group actually increased by two percent to $32.9 billion.
Thanks to impressive growth from the Data Center, IoT, and Intel Security Groups, the company’s total revenue increased seven percent in 2016 to $59.4 billion, reaching a new record. Intel also generated record annual cash flow from operations of $21.8 billion. Adjusted net income came in at $13.2 billion, translating to earnings of $2.72 per share. Both adjusted net income and earnings per share (EPS) figures represented a nine-percent increase from 2015.
In 2016, Intel declared and paid total dividends of $1.04 per share. Since it generated $2.72 of EPS, the company was paying out just 38.2% of what it earned. A low payout ratio like this leaves a sizable margin of safety and gives plenty of room if Intel decides to further increase its payout.
Past performance is no guarantee of future results, as I always say. But if industry trends stay the same for Intel’s top growth drivers, the company should be able to further grow its business. In that scenario, Intel could announce a low-single-digit dividend increase at some point in 2018.
#8. What to Expect from Intel in 2017
The stock market is forward-looking, so it’s important to pay attention to the company’s growth prospects. Intel has issued its own guidance. For full-year 2016, the company expects its revenue to remain flat. Adjusted operating income is projected to be $17.1 billion, which would represent a 3.6% increase from last year. Intel expects its full-year EPS to be approximately $2.80, which would represent a 2.9% percent increase from 2015.
Wall Street’s expectations are similar to the company’s own guidance. For 2016, the consensus estimates are $59.99 billion of revenue (up 0.8%) and a $2.79 of EPS (up 2.6%). Most recently, the company has done rather well in terms of beating Wall Street’s expectations. In all four quarters of 2016, Intel has beaten analysts’ EPS estimates every single time. (Source: “Intel Corporation (INTC),” Yahoo! Finance, last accessed April 12, 2017.)
One of the biggest pieces of news about Intel in 2017 is the acquisition of Mobileye NV (NYSE:MBLY), an Israeli technology company. Mobileye specializes in developing vision-based advanced driver assistance systems that are critical to self-driving cars. In March, Intel announced that it will acquire Mobileye for $15.3 billion. The transaction is expected to close within this calendar year. (Source: “Intel To Acquire Mobileye,” Intel Corporation, March 13, 2017.)
Autonomous vehicles are believed to be the “next big things” in tech, with both automakers and Silicon Valley firms vying to become to first one to enter the market. Note that this is not the first time Intel has tapped into this field. In July 2016, the company announced that it is partnering with Mobileye and BMW Group to bring fully autonomous vehicles to streets by 2021. (Source: “BMW Group, Intel And Mobileye Team Up To Bring Fully Autonomous Driving To Streets by 2021,” Intel Corporation, July 1, 2016.)
The size of the self-driving car industry is not easy to estimate. Intel expects that the vehicle systems, data, and services market opportunity could reach $70.0 billion by 2030. With its own technology expertise and the acquisition of Mobileye, a leading computer vision technology company, Intel could be one the first companies to bring autonomous driving to reality. If Intel manages to crack open just a few percent of its target market, it could bring in billions of dollars of extra revenue.
#9. Intel Stock Dividend Reinvestment Plan (DRIP)
Intel stock pays handsome dividends to its shareholders, but that doesn’t mean shareholders have to spend all of it. One thing many long-term investors have been doing to build wealth is reinvesting their dividends. This can gradually increase their stake in dividend-paying companies, and with larger stakes, the dividend payments they receive will gradually increase as well. Similar to compound interest, reinvesting dividends in solid companies could allow the power of compounding to substantially boost the return of an investor’s portfolio over time.
Some companies allow investors to buy shares directly from them, eliminating the fees and commissions paid to brokers. In Intel’s case, investors cannot purchase shares directly from the company, but it does offer a dividend reinvestment program (DRIP). How can investors sign up for the program? Well, an investor would have to purchase their first shares through their brokerage account and then register for Intel’s DRIP program. The program is administered by the company’s transfer agent, Computershare Investor Services LLC. After signing up, the investor would be able to invest between $50.00 and $15,000 per month to purchase Intel stock without fees or commissions. (Source: “Where Can I Find Stock Purchase (DRIP) Information?,” Intel Corporation, last accessed April 12, 2017.)
Investors interested in registering for Intel’s dividend reinvestment plan can visit Computershare’s web site or call 1-800-298-0146.
#10. Intel Stock Split History
When a company’s stock prices rises above a certain level, it may choose to split its shares to make them look more affordable. A stock split increases the number of shares outstanding. Because there is no change to the fundamentals, each share will have a lower price after the split.
Due to Intel stock’s dramatic surge until the dot-com bubble burst, the company has split its shares quite a few times. Since its IPO, Intel has completed 13 stock splits. There were seven two-for-one splits, five three-for-two splits, and one five-for-four split.
Note that from 1993 to 2000 alone, Intel stock had five two-for-one splits. Those five splits increased the number of shares outstanding by 32-fold.
| Payable Date | Record Date | Type of Split |
| 07/30/00 | 07/02/00 | 2-for-1 |
| 04/11/99 | 03/23/99 | 2-for-1 |
| 07/13/97 | 06/10/97 | 2-for-1 |
| 06/16/95 | 05/16/95 | 2-for-1 |
| 06/06/93 | 05/06/93 | 2-for-1 |
| 10/28/87 | 09/28/87 | 3-for-2 |
| 06/30/83 | 06/16/83 | 2-for-1 |
| 10/08/80 | 09/08/80 | 2-for-1 |
| 05/31/79 | 04/30/79 | 3-for-2 |
| 09/01/78 | 08/04/78 | 5-for-4 |
| 05/26/76 | 04/26/76 | 3-for-2 |
| 05/15/74 | 04/15/74 | 3-for-2 |
| 05/17/73 | 04/16/73 | 3-for-2 |
Source: “Stock Splits,” Intel Corporation, last accessed April 13, 2017.
#11. Will INTC Stock Split in 2017?
As you can see from Intel’s stock chart, the company’s share price never fully recovered from the crash at the beginning of this millennium. In Intel stock’s early days, the company would split its shares after they reached around $50.00 apiece. Since then, as it became more established, the threshold has been raised to $100.00.
Today, Intel stock trades at $35.63 apiece. The company’s share price has climbed quite a bit since the Great Recession in the late 2000s, but is still way below its previous critical point that led to stock splits. Moreover, with more substantial dividend payments, the momentum in Intel stock is likely not going to be as strong as in the 1980s and 1990s. There is still room for Intel stock to grow, but I don’t expect the company to announce a stock split anytime soon.
#12. Final Thoughts On Intel Stock Dividends
In today’s stock market, dividends don’t seem to get as much attention as before. When someone tells you that they made triple digit gains by trading the hottest tech stocks last year, who cares about a few percent of dividend yield? And let’s be honest, tech stocks are known for their massive moves these days. In 2015, Netflix Inc (NASDAQ:NFLX), Amazon.com, Inc. (NASDAQ:AMZN), and Activision Blizzard, Inc. (NASDAQ:ATVI) were the top three performers among all S&P 500 companies. In 2016, the top gainer in S&P 500 was another tech stock: Nvidia Corporation (NASDAQ:NVDA).
However, investing in companies that are willing to return value to investors periodically could be rewarding. Intel stock had a choppy ride in recent years, but the company has a sustainable business model and an established market position. With its ongoing developments, investors willing to have some exposure to the tech sector that also want to collect above-average dividends should take a serious look at INTC stock.