Intel Corporation (NASDAQ:INTC) may be on the verge of greatly boosting their dividends over the next 18 to 24 months, after ten straight quarters of 22.5 cent dividends. As reported by Barron’s, Jefferies analyst Mark Lipacis believes an 8% to 45% dividend hike could be in the cards for Intel Corporation (NASDAQ:INTC) shareholders within the next two years.
Intel Corporation (NASDAQ:INTC) announced just last week that their most recent quarterly dividend, payable on December 1, would remain at the same level it has since their June 1, 2012 dividend of 21 cents. That flat-lining dividend rate was met with mild reproach from investors, who sent the stock down 1.3% in trading over the next two days. However it rebounded to close out the week up, making up most of those two day losses.
Intel Corporation (NASDAQ:INTC) instead has plans to buy back $20 million in shares, lowering their share count by about 14%, the process of which it plans to accelerate throughout the remainder of this year. The timing for the share repurchases doesn’t seem ideal, given their stock is hovering around all-time highs and up a meaty 34.16% this year, while free cash flows have been falling.
However Intel Corporation (NASDAQ:INTC) is showing a commitment to investing in their future by buying back shares and investing billions in operational upgrades. Chief among them is an effort to get their foot in the mobile door, a market which has a lot of potential growth for Intel Corporation (NASDAQ:INTC), given their miniscule share of the market at present compared to the desktop chip sector.
With the share buyback lowering the total dividends being paid out and yields falling from as high as 4.70% in late 2012 to nearly half that figure now, pressure will be on Intel Corporation (NASDAQ:INTC) to raise their dividends in 2015, which seems likely at this point. It wouldn’t be unreasonable to expect a bump up to 25 cents when they announce their next dividend return in January, with the potential for it to rise as high as 32.5 cents over the next two years.
Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW for all the details.