Intel, a semiconductor giant listed on the NASDAQ under the ticker symbol INTC, has been known for its generous dividends in the past. However, last year, the company made a significant change in its dividend policy. In spring 2023, Intel reduced its quarterly dividend per share from $0.365 to $0.125. Since then, the dividend payout has remained steady, with annual increases of $0.50 per share. This move was part of Intel’s updated capital allocation strategy, which focused on accelerating the construction of chip manufacturing facilities.
In 2023, Intel spent $3.1 billion on dividend payments, a 49% decrease from the previous year’s all-time high of $6 billion. It is expected that the dividend payout for 2024 will be similar to that of 2023, as the company’s board is unlikely to raise the payout this year. The construction of chip manufacturing facilities is still ongoing, and Intel needs to prioritize cost savings in other areas. Currently, Intel’s free cash flows are negative due to the cash-intensive nature of its infrastructure projects.
Overall, Intel’s dividend policy change reflects the company’s shift towards investing more heavily in expanding its chip manufacturing capabilities. Investors looking for stable dividend income from Intel should be aware of the company’s focus on capital expenditure and cost management in the near term.
For more information on Intel’s dividend payout and financial outlook, visit Fool.com.
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