Dear Joey Smith
Re: With a tech stock like Intel, the price of the stock is more likely correlated with profit and cash growth rate, not dividends.
The only reward long-term Intel investors see is the Dividend. Management is rewarded for increase in “profit and cash growth rate”. Management exhibited their disdain for dividend by cashing in their shares.
Re: “For a tech stock, Intel already has a high dividend payout.”
The only other tech stock with very high cash flow is MSFT. The rewarded their investors by giving a one-time huge dividend, when they moved the cash into the US.Presently its shares suffer despite very good cash flow because their yield is low.
Re: “One could argue that an increase in dividends might be "bad" news since it indicates lack of growth areas to invest in.”
The abrupt lowering of the yield from 2007 to 2008 despite an expected dramatic increase in cash flow (“revenue stream”) indicated a lack of regard for the interest of investors. At the end the investors determine the value of shares. Their valuation is based on an assumption that when the cash-flow increases their dividend will also go up.
Re: “If/when Intel announces design wins for Silverthorne, I think it will move the stock because it represents a "new" revenue stream.“
I expressed my hope that the Board of Intel will return to 2% yield. Investors will respond by biding up the price on INTC.
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