Is Intel's Dividend in Trouble?
Intel (NASDAQ: INTC) is struggling these days. That was abundantly clear in the semiconductor giant's fourth-quarter results. Revenue plunged 32% to $14 billion -- and was at the low end of its guidance range -- and fell 20% for the full year. Meanwhile, earnings and cash flow were also down sharply.
These brutal financial results have weighed on the company's stock price. It has shed nearly 50% of its value from its peak early last year. That has driven up its dividend yield past 5%. While that big-time yield likely looks appealing to income-focused investors, the company's payout could be in trouble if market conditions worsen.
Intel produced $7.7 billion of operating cash flow during the fourth quarter. That was enough to cover its net capital expenses of $4.6 billion, enabling it to produce $3.1 billion of adjusted free cash flow. This provided Intel with more than enough money to cover its $1.5 billion dividend payment during the period.
Source Fool.com
