No. of Recommendations: 3
Hi Jim,

I'm glad you're still looking at Intel, as I recently established a position and really enjoy your analysis.

Here's a link to some INTC analysis I did on another board that focused more on the dividend side of the stock: http://boards.fool.com/1081/amateur-intc-analysis-29224368.a...

I'm sure there's nothing in there that you're not already aware of, and it's not really an MUE thesis, but I've been wondering if the dividend alone could be a catalyst for an increase in the stock price. Looking at historical payout ratios for Intel, if the stock stays in the $20 range it could easily reach a 5% dividend payout in the next couple of years. Specifically, if INTC raises its dividend by 15% per year for the next two years (inline with the last several years) from $.72 to $.95, and stock price stays at $20, we're talking about a 4.8% dividend yield.

I have a difficult time believing that a company as solid as Intel, paying that kind of a dividend, wouldn't have its price bid back up to a more reasonable dividend yield of 2% or 3%. If you take that same dividend of $.95 and solve for a 3% dividend yield, we get a stock price of almost $32. Solve for a 2.5% dividend yield and we get $38.

Fletch
Long INTC
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.