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Is Intel Corporation Still One of the Best Dividend Stocks in 2014?

Good news: Intel (NASDAQ: INTC  ) just announced another dividend. Payable on June 1 to shareholders of record as of May 7, this distribution amounts to $0.225 per share, or $0.90 per share on an annual basis.

Bad news: Intel's dividend has been sitting at $0.225 per share since summer 2012. Today's announcement locks in a solid two years since the last dividend increase. Does Intel still qualify as one of the Dow's best dividend stocks in 2014?

Things used to be different. Looking back over the last decade, the chipmaker has been the second-fastest dividend grower in the Dow Jones Industrial Average (DJINDICES: ^DJI  ) with a 27.4% compound annual increase.

INTC Dividend Chart

INTC Dividend data by YCharts.

Only UnitedHealth Group (NYSE: UNH  ) has boosted its dividends faster, and the insurer started from a largely symbolic annual payout of just $0.015 per share. It's easy to grow quickly when you're starting from a very small payout base.

INTC Dividend Yield (TTM) Chart

INTC Dividend Yield (TTM) data by YCharts.

UnitedHealth still sports a far smaller dividend yield than Intel, despite its rampant payout growth. Do keep in mind that UnitedHealth shares have crushed the Dow in recent years while Intel has languished. These share price performances served to limit UnitedHealth's dividend yields while boosting Intel's.

INTC Chart

INTC data by YCharts.

Intel still offers one of the richest dividend yields among the 30 Dow stocks -- but this flatline of an increase curve is not how you maintain a shareholder-friendly payout.

When I opened my own Intel position in 2012, I expected a strong dividend policy to continue growing. I'm still holding Intel because I believe the shares are undervalued, but I no longer see it as a solid dividend play.

Two years without dividend increases mark the stock as a questionable long-term dividend play -- current 3.6% yield notwithstanding. One such period could be forgiven, as I forgave Intel's paused dividend increases amid the 2008-2009 economic crisis. But now it's becoming a pattern.

The Dow's best dividends in 2014 no longer include the one blue-chip dividend that I own. My new investment thesis for Intel is that the stock price should climb when the mistaken "death of the PC" zeitgeist fades away -- and that would undermine the dividend angle even more.

If you're looking for a dependable dividend stock for the long term, I would say that UnitedHealth's recent commitment to payout increases makes it look better than Intel.

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Anders Bylund

Anders Bylund is a Foolish Technology and Entertainment Specialist. Where the two markets intersect, you'll find his wheelhouse. He has been an official Fool since 2006 but a jester all his life.

Hypoallergenic. Contains six flavors not found in nature. Believes in coyotes and time as an abstract.

Follow Anders on Twitter, LinkedIn, and Google+.

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9/4/2015 4:30 PM
^DJI $16102.38 Down -272.38 -1.66%
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Intel CAPS Rating: ****
UNH $112.36 Down -1.63 -1.43%
UnitedHealth Group CAPS Rating: *****