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Dividend investors gravitate to stocks with high payouts. For a long time, tech stocks preferred to hoard their cash for use in acquisitions and to pad their balance sheets. Yet, Intel (NASDAQ:INTC) was one of the first major tech stocks to bother paying a dividend and, over time, the payout from the chipmaker has become a substantial part of its overall return.

Now, Intel boasts a yield that puts it in the top half of all the stocks in the Dow Jones Industrials (DJINDICES:^DJI). When you consider the huge total returns the chipmaker has enjoyed recently, it highlights just how surprising Intel's business has been lately. Let's look at three ways that Intel deserves to be considered a top dividend stock.

1. Intel was a pioneer in tech dividends.
The bull market of the 1990s was led by high-growth technology stocks, and the key to maximizing growth for any company was taking any available cash and reinvesting it into its business. As a result, even some of the largest tech companies held out on paying any dividend at all for a long time, fearing that investors would see their beginning to make dividend payments as a sign that their best growth days were over.

Intc

Source: Intel.

Intel, though, bucked the trend early on. For more than 20 years, the stock has paid a dividend, establishing a track record that few of its peers can match. Admittedly, at the time, the $0.10 per share quarter dividend represented only about a 0.6% yield. Many attributed the move to guidelines from mutual funds and other institutional investors that require investing in income-producing stocks, rather than any intention to reward shareholders. Nevertheless, by doing so, Intel clearly communicated that it had arrived as a powerhouse in the industry, and was willing to accept accusations of having passed its peak growth as a result.

2. Intel has dramatically upped its dividend game.
Intel's dividend remained relatively stagnant in the early 2000s in the aftermath of the tech bust. Yet, from 2004 on, Intel got onto the dividend-growth bandwagon in a big way, doubling its payout two years in a row, and then establishing a consistent record of further increases subsequently. From late 2007 to 2012, Intel doubled its dividend payout. Even though the tech company hasn't made any further increases since then, the stock still yields a respectable 2.6%, even after big gains in the underlying stock price.

Some analysts believe that Intel's path to dividend riches has just begun. Mark Lipacis, at analyst firm Jefferies, argued recently that Intel could boost its payout by as much as 45% in the next two years, reestablishing its position near the top of the Dow Jones Industrials in terms of yield. Even if more modest increases come, they'll nevertheless encourage those investors who have wondered why the company hasn't more aggressively raised its payout during the past two years.

3. Intel's business boasts both dependable cash flow and new growth prospects.

Intc Logo Thing

Source: Intel.

The best thing about Intel is that it appears to have awakened from its slow-growth slumber. For a long time, Intel has coasted on the success of its PC microprocessors, which are a huge cash cow that have financed dividends while leaving plenty of additional profits available for reinvestment. Yet, Intel was slow to get into the mobile game, and that allowed competitors to get a head start in tapping the huge potential of the mobile market.

Now, Intel has finally started executing on a viable mobile strategy that includes both seeking out the lower-end niche, while also challenging industry leaders at the cutting edge of technology. It's far from a sure thing that Intel will reestablish itself as the industry's leader, but just making the effort has been enough to drive investors to consider the stock in a new light. Success down the road could lead Intel to start raising dividends again.

Intel hasn't given dividend investors everything they could want, especially with payout levels remaining unchanged since 2012. But with potential for further growth both in dividends and in share price, Intel still looks like a compelling value, even after the stock market's record run.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.