A Look at Intel’s Massive New Buyback Plan

The PC is far from dead, and so is Intel's (NASDAQ: INTC  ) plan to spend billions on buying its own stock. The tech giant's shares jumped this week after it posted strong quarterly results, and raised its full-year profit and sales guidance for the second time this year. But investors seemed even more pleased with Intel's plan to ramp up share repurchases in the quarters ahead.

Intel's quarterly spending on stock buybacks. Source: company financial filings.

In the following video, Fool contributor Demitrios Kalogeropoulos puts that new buyback plan in perspective, noting Intel should, in six months this year, spend more than double what it spent on its shares throughout 2013.

A critical question for shareholders, though, is how the company plans to fund that massive spending increase. The good news is that it's not coming from a dividend cut, or through shortchanging capital investments. Instead, most of the funding will come from operating cash flow, which was a solid $21 billion last year, despite the weak business trends. Still, Intel will also have to make a change to its capital structure that some investors won't like: Management said that they plan on lowering the amount of cash that's kept on Intel's books going forward in order to fund this new pace of buybacks. Watch the video for Demitrios' full take.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks like Intel simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.


Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 17, 2014, at 8:01 PM, Tj1952 wrote:

    Wonderful article in regards to dividend stock like Intel & 20billion backs. Funny, Seeking-Alpha been quiet about Intel's great earnings...

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3031777, ~/Articles/ArticleHandler.aspx, 12/20/2014 11:49:52 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement