Boosting a dividend is viewed by some bearish investors as similar to announcing a large share buyback initiative: as a means of "hiding" less than stellar financial results. Which raises the question: How should Intel's (NASDAQ:INTC) recent decision to boost its payout by $0.08 annually to $1.04, upping its dividend yield to 3%, be viewed?

It's a fair question, and one best answered by determining what Intel's prospects for future growth were prior to its dividend hike, particularly as CEO Brian Krzanich manages its transition to new, fast-growing markets including cloud-based data centers, the Internet of Things (IoT), and mobile technologies. Was the increase in dividend simply icing on what was already a good growth and income cake, or a short-term bandage to mask larger problems?

Turning the corner
Even before sharing the news of its dividend increase, Intel had forecast a slight, year-over-year improvement in Q4 revenue. The $14.8 billion in sales, give or take, expected this quarter may not warrant unbridled enthusiasm given 2014's Q4 revenue was $14.72 billion. That said, how Intel intends to meet its revenue goal this quarter, and deliver "growth in the mid-single digits" in fiscal 2016, does warrant a closer look.

Though Intel stock has enjoyed a slight pop since announcing Q3 earnings on Oct. 13, much of that was due to its increased dividend, not its quarterly financial results, and it's easy to see why. Investors and industry pundits alike bemoaned not only Intel's $14.5 billion in revenue last quarter -- essentially flat compared to the year-ago period -- but the on-going declines in its PC-related client computing group.

Down another 7% in Q3, Intel's client computing group continues to be the focus of consternation. However, there's a great deal more to the Intel story than PCs. Yes, client computing sales declined to $8.5 billion in Q3, and don't be surprised to see another year-over-year drop when Intel announces Q4 and annual earnings news early next year.

The thing is, despite the drop in PC-related revenue, Intel was still able to generate sales equal to the year-ago period, and based on its forecasts for this quarter and next year, top-line growth is on the way. How can this be, given Intel's "reliance" on the slowing PC market? Because Intel is more than a supplier of chips for desktops, and therein lies the opportunity, with or without the recent dividend boost.

The future is now
Even as Intel attempts to chip away at industry-leading Qualcomm's (NASDAQ:QCOM) dominant position in smartphones, Krzanich's mobile objectives appear far from being met. As it stands, Qualcomm owns about 85% of the market for smartphone chips. That's a tough nut for Intel to crack, but there's light at the end of Intel's mobile tunnel.

Thanks in part to Qualcomm's market domination, device manufacturers are becoming uncomfortable with their reliance on just one chip maker, which some are predicting will open the door for the Intels of the world. But even if Intel is "stuck" with its current line-up of chips for tablets, ultimately, its fortunes lie in its data center and IoT initiatives, which should be music to the ears of investors.

Last quarter's 12% jump in cloud-based data center revenue, to $4.1 billion, was easily the most critical aspect of Intel's Q3. Strong data center results were almost single-handedly responsible for saving what otherwise would have really been a tough quarter. Just as importantly, Intel's data center sales increases are a result of Krzanich's shift in focus, meaning he's delivering on that key objective.

Though on a smaller scale, IoT also helped to salvage Q3 and, along with data center revenue, will continue to play a crucial role going forward. Up 10% year over year, IoT sales combined with data center results now make up approximately one-third of Intel's total revenue. As that percentage continues to grow, Intel's declining reliance on PCs will wane even further.

With over $14 billion in cash and short-term investments on the balance sheet, Intel's recent dividend increase won't hinder its financial wherewithal in the slightest. Did Intel's decision to give even more back to investors play a role in its recent stock price increase? You bet, but it won't be long before investors recognize that Intel has a lot more to offer than its 3% dividend yield.

Tim Brugger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Qualcomm. The Motley Fool recommends 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.