This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Intel: The Ultimate Income-Producing Tech Stock

NEW YORK ( TheStreet) -- Today Intel (INTC - Get Report) reports its quarterly earnings after the market closes.

Monday felt like a day of purging for the major stock market averages, with the S&P 500 closing down 2.3% to finish slightly above the technical support level of 1552. The world's investors are poised at the edge of their seats wondering what will happen today, especially after gold's price fell another 9.3% Monday (see my most recent article about "The Wacky World of Gold and Silver").

The bloodbath in the investment markets was partially blamed on slowing economic growth in China. Many solid, low PE ratio dividend-paying stocks like Eaton (ETN) fell sharply. ETN closed the day down over 5% to $57.22.

Yet, the stalwarts of the old-school technology titans who pay generous dividends didn't budge much at all. Microsoft (MSFT) closed down 10 cents tp $28.69 Monday on higher than normal volume. MSFT's dividend yield-to-price is nearly 3.21% and it reports earnings on Thursday.

It's hard to disagree with our own Jim Cramer on the topic of whether a China slowdown is a threat to big tech companies. "Take your pick, but tech isn't as dangerous as it would seem because of China, it's just dangerous because we are about to get earnings," Cramer said Monday.

Perhaps that's INTC shares moved 1.36% lower on lower than average volume. Closing at $21.38 lifted INTC's yield-to-price to an amazing 4.2%. Those who follow INTC know management has been committed to keeping the dividend yield at high levels.

The conundrum the company faces is that over the past 10 years the dividend has grown close to a 30%-per-year clip. That slowed way down last year, but at the current 90 cents per year payout this has pushed the payout ratio to around 41% of net income.

Analysts are expecting, on average, a 22.6% decrease in INTC earnings-per-share (EPS) to around 41 cents. Without an announced increase in the dividend payout it will stretch the payout ratio closer to 50% or higher.

Sales growth and revenue for the first quarter of 2013 is also expected to be down an average of around 2.3%. A closer look at the one-year chart below reveals how the price-per-share is impacted by both the diluted quarterly year-over-year EPS and the trailing 12-month quarterly per-share revenue numbers. INTC Chart INTC data by YCharts
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
INTC $30.28 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs