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Intel (NASDAQ:INTC) announced a dividend cut by two-thirds to $0.125 in order to conserve cash while preparing for a substantial increase in its chip manufacturing capacity in the U.S. Shares closed more than 2% lower yesterday.
The company said it will also temporarily cut compensation and rewards programs for its executives and staff as part of a “prudent” capital allocation strategy.
Stock prices have fallen approximately 10% since Bloomberg’s report last Wednesday, which mentioned rumors of a potential decrease in dividends.
Following the company’s announcement, BMO Capital reiterated its Market Perform rating and $28 price target on the stock, noting that “Intel had to do this.” The firm said it identified this as one of the two primary reasons for changing their opinion on the stock around 18 months ago, as they believed the company’s high cash burn rate would jeopardize its dividend payments. “The savings from this will be meaningful, about $4B,” added the firm.
Another Wall Street firm, Morgan Stanley, upgraded the stock to Equalweight from Underweight with a price target of $28.00 (from $29.50) following the announcement.
Needham & Company reiterated its Buy rating and $32.00 price target, noting that in addition to preserving FCF by managing expenses, Intel believes the cut will help maintain its A-rating from credit agencies, which is important for funding its long-term IDM 2.0 and foundry strategic plan. “Although not a total shock, this is a disappointment that may result in some shareholder turnover as income investors migrate to higher yields,” said the firm.
TJX Cos. (NYSE:TJX) announced it plans to hike its dividend by 13% to $0.3325, expected to be declared in March 2023 and payable in June 2023, subject to the approval of the company’s Board of Directors.
The company announced its Q4 results yesterday, highlighted by in-line EPS, revenue beat, and worst-than-expected guidance.
eBay Inc. (NASDAQ:EBAY) hiked its dividend by 13.6% to $0.25 per share, or $1 annualized, for an annual yield of 2.1%. The dividend will be payable on March 24, 2023, to stockholders of record on March 10, 2023, with an ex-dividend date of March 9, 2023.
Shares fell more than 5% premarket today despite the company beating its Q4 results yesterday. The company’s Q1/23 guidance also came in better than the consensus estimates.
Richmond Mutual (NASDAQ:RMBI) hiked its dividend by 40% to $0.14 per share, or $0.56 annualized, for an annual yield of 4.2%. The dividend will be payable on March 16, 2023, to stockholders of record on March 2, 2023, with an ex-dividend date of March 1, 2023.
M&T Bank Corp. (NYSE:MTB) hiked its dividend by 8.3% to $1.30 per share, or $5.2 annualized, for an annual yield of 3.4%. The dividend will be payable on March 31, 2023, to stockholders of record on March 6, 2023, with an ex-dividend date of March 3, 2023.
Primo Water (NYSE:PRMW) hiked its dividend by 14.3% to $0.08 per share, or $0.32 annualized, for an annual yield of 2%. The dividend will be payable on March 27, 2023, to stockholders of record on March 10, 2023, with an ex-dividend date of March 9, 2023.
