Monday, March 21, 2011

INTEL, symbol INTC, dividend machine for March 21, 2011

SAN FRANCISCO - MAY 13:  A pedestrian walks by...Image by Getty Images via @daylife
This week’s income investment is a company whose products you use every day.  Dividend machine Intel, symbol INTC 's products are in so many machines you use.

Buy Intel's Earnings

Any time you can buy $2.00 of earnings for less than $20.00 you have a nice opportunity.  You will hear growth investors argue that INTC is a bore in the exciting world of technology.  Income investors like income even if our partner is a boring producer of income.

Yet, I argue that when a company sports a 24.2% growth of income in 2010 it has growth and  is the kind of company I am happy to own because I look for income growth which comes from earngins.

Dividend Increase

Intel just raised its dividend and this has been a wonderful pattern since INTC started paying a dividend. You will be paid $.1812 per share on June 1, 2011 provided you own it by May 4, 2011.  INTC’s yield is 3.64% based on the closing price of $20.19 on March 21, 2011.   Plus Intel has almost no debt with a D/E ratio of only .04.

Add INTC  to the portion of your portfolio dedicated to paying the bills.  INTC will pay you and will continue to increase the payout which is more than social security did this last year.

INTC has also provided several opportunities to write calls at a 10 % profit.  Something always seems to happen that sends INTC’s stock price south of $20.  That is when I buy.  Since I like the dividend machine aspect of INTC, I write calls on only part of my position.

INTC, a dividend machine for income investors.

Very Truly Yours,
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