Intel Corporation (NASDAQ:INTC) has been a popular play for many investors – including a good number of hedge funds that we track – for quite a few reasons, but not the least of which has been the company’s tradition of increasing its dividend every year as the company has grown. But according to a research note by Stacy Rasgon of Bernstein Research Thursday, it appears that era of good may be slowing if not stopping. He says that Intel’s recent investments in factories and stock buybacks have cut down the company’s cash reserves from where those dividends would come.
Rasgon wrote, “We believe a continued slower pace of dividend increases is possible versus what investors have enjoyed in the past, under our current forecasts for the company’s growth.”
Intel Corporation (NASDAQ:INTC) has been working hard to keep its microchips costs low to help promote ultrabooks, which use Intel’s chips very heavily. That has contributed somewhat to the slow er pace of dividend increases recently, Rasgon wrote, but also cited the building of more factories and a share buyback program that has also depleted the company’s cash stash to a level “well below … peers” – whatever that might mean.
What are your thoughts? Are you invested in Intel Corporation (NASDAQ:INTC), and if so why? Is it because of the dividends, or the products? Whether invested or not, let us know your thoughts in the comments section below.
DISCLOSURE: I own no positions in any stock mentioned.
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