The bear market that started last year has taken countless stocks lower. A silver lining of the sell-off is it drove up dividend yields, since they move in the inverse of share prices. The yields on some well-known stocks rose to their highest levels in years, making them attractive to income-seeking investors. Two that stand out are Verizon (VZ 0.90%) and Intel (INTC -2.40%), which saw their dividend yields soar to roughly 7.5% and more than 5%, respectively. 

However, with their stock prices on an upswing after hitting bottom late last year, their dividend yields have fallen from those peaks. Here's a look at whether Verizon and Intel are still good buying opportunities for income-seeking investors.

The streak goes on

Shares of Verizon got shellacked last year. They were down more than 30% at one point, pushing the company's dividend yield up near 7.5%. 

The stocks have been on an upswing since bottoming out in October, putting them down less than 20% from the beginning of 2022. That has pushed the dividend yield down to its current level of 6.25%. While that's not as alluring as it had been, it's near the company's highest level since the financial crisis. Further, it's well above the market's average, given the S&P 500's 1.7% dividend yield. 

Verizon can easily cover its massive dividend payment. The telecom giant produced $28.2 billion of cash flow from operations through the third quarter, funding capital expenditures ($15.8 billion) and its dividend outlay ($8.1 billion) with room to spare ($4.3 billion). That allowed the company to maintain a strong, investment-grade balance sheet as debt declined, giving it a 2.7 times leverage ratio at the end of the third quarter. 

While Verizon's cash flow was under some pressure last year, its capital investments and recent actions on pricing and costs should boost its bottom line in the future. That should enable Verizon to continue growing its dividend, which it has done for 16 straight years, the longest current streak in the U.S. telecom sector. 

Making moves to fund its growth

Intel stock cratered last year, falling 50% at one point, driving its dividend yield well past 5%. The recent upswing in the stock price has cut that decline to around 40% while putting the dividend yield near 4.9%. That's still a historically high level for the semiconductor company.

The primary issue weighing on the stock last year was weakening demand due to a slowdown in tech spending. The company's revenue fell 20% in the third quarter, while earnings plunged 85%. Meanwhile, free cash flow was also under pressure. 

The weakness in free cash flow is a concern because Intel is investing heavily in building new manufacturing capacity. The company expected capital spending to reach $25 billion last year, which would consume its free cash flow. That meant Intel had to utilize its balance sheet to fund expansion and the dividend, the latter of which cost it nearly $4.5 billion through the first nine months of the year.

On a positive note, Intel has a cash-rich balance sheet, ending the third quarter with over $22.5 billion in cash against roughly $37.2 billion of debt. 

The company took some important steps to improve its free cash flow. It's undertaking a significant cost reduction effort that should cut expenses by $3 billion this year and up to $10 billion by 2025. The company also secured up to $15 billion in funding for two of its new semiconductor manufacturing sites in Arizona through a unique deal with Brookfield Infrastructure. The partnership will see Brookfield fund 49% of the estimated $30 billion cost in exchange for a similar share of its future revenue.

Intel also completed the initial public offering of its Mobileye unit, raising about $800 million. Mobileye will use most of that money to repay a debt owed to Intel, giving that company additional capital to fund expansion projects. 

These moves should bolster Intel's financial position, improving its ability to maintain and continue growing its hefty dividend. 

Enticing income options

While their shares have started to recover, Verizon and Intel still trade at attractive levels, given their historically high dividend yields. Meanwhile, both payouts are likely to rise in the future. Because of that, they still look like enticing investment opportunities for income-seeking investors these days.