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Intel: Why I Can't Own This Great Company

May 03, 2020 4:27 PM ETIntel Corporation (INTC)47 Comments


  • In September I said that Intel could be the perfect tech recession stock.
  • But the same element that stopped me from investing then is stopping me know: the dividend policy.
  • Nonetheless, for those who aren't as concerned with dividends as I am, Intel is a market leading, undervalued, high quality stock, which will likely continue beating the market.

Written by Sam Kovacs


In September last year, I wrote an article in which I claimed that Intel (NASDAQ:INTC) could be the perfect tech recession stock. I advised shareholders to hold on to their shares. Since then the stock has returned 10% while the S&P 500 has lost 5% of its value.

Source: Open Domain

And during all that time, I’ve been sitting on the sidelines, thinking what a shame it was that I could not own Intel. I started to feel FOMO, and needed to do something about it. I have a set process when I start feeling emotional about my decisions. When I feel FOMO, I walk away for a few days, then come back and look at the facts: Why did I decide not to purchase Intel? And has the situation changed?

In September I said that “the current combination of dividend yield and dividend growth potential isn't satisfactory for dividend investors”.

While Intel has been growing its dividend for decades, in the past few years it has been doing so at a rate which is not satisfactory given its extremely low yield. Management, while committed to their dividend, are not committed to increasing it aggressively. Intel’s payout ratios and revenue and net income growth would suggest that they have the ability to increase their dividend significantly, yet year in, year out, they choose not to do so.

Intel currently has a dividend yield of 2.2% & trades at $59.98. Based on our MAD Scores, INTC has a Dividend Strength score of 89 and a Stock Strength score of 96.

Intel is the type of company which I would love to own. The company made its way into my list of 24 superior large cap dividend stocks. But I cannot own Intel, because its dividend program doesn’t

This article was written by

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Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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