Wednesday, August 7, 2013

Dividends & Income - INTC

I see opportunities in this market and one of them is INTC.   


INTC goes up and down and pays the dividend every quarter.   Let’s make money from the company’s dividends and more income on the INTC’s stock price.




INTC DIVIDENDS



Read this excellent article from “Seeking Alpha.”http://seekingalpha.com/article/1604562-what-happened-to-intels-dividend ; Mr. Mauer provides all the information you need to know to take a flier on INTC.   


His point that INTC did not increase their most recent dividend suggests that future dividend increases are suspect.   In this excellent article, you can learn about INTC’s dividend fundamentals and decide for yourself if you trust INTC dividend increases.


We who depend on the The Money Madam’s Strategy must be disciplined.   With that in mind I looked at the four criteria I use to select a dividend machine.  



This table illustrates INTC’s current dividend machine bona fides.  


















INTC CALLS



When you can find a dividend machine that is in a trading range, you take the risk that the sellers are right and the company stinks.    During your time of indecision make money using covered calls.




Look for calls that are between 90 and 100 days out so you get the quarterly dividend the call premium and of course the gain because calls on a quality company like INTC should always result in a gain if they exercise the call option and take your stock. With a stock like Intel, you may very well be able to buy it back lower.  You never know. 




If you still own INTC on November 5, 2013, you should receive no less than $.225 /share.   If INTC does not increase the dividend and you think the company will not provide you with dependable income increases, you can sell it and move into another dividend machine.  If they increase the dividend you can hope the market will ignore the good news and not take your stock; then you can look for more calls throughout the year while you cash that fatter dividend check.



The Money Madam

* Since 2002 the dividend has increased on occation, INTC will increase twice in a year and on occasion it will wait for 5 quarters.  If history is picture to the future the dividend should increase?