INTC stock should slowly move toward its target price of $59.48, based on an average 2.45% dividend yield
On Jan. 26, Intel Corporation (NASDAQ:INTC) raised its
dividend per share (DPS) by 5% when it announced fourth-quarter (Q4) and 2021
earnings. As a result, I wrote on Feb. 3, a month ago, that INTC stock was
undervalued by at least 19%. This was because it was trading at $49.51 on Feb.
3.
However, as of Mar. 3, a month later, INTC stock was
actually lower at $47.93 per share. Obviously, this was likely due to the
market downturn from the Russia invasion of Ukraine.
Nevertheless, now that the annual dividend is set at $1.46
per share, its dividend yield is now higher at 3.04%. This can be seen by
dividing $47.93 by $1.464.
This is a significantly higher yield than Intel has had in
the past. For example, Morningstar reports that the average dividend yield for
the past 5 years has been 2.48%.
This implies that INTC stock is worth at least $58.87 per
share, or 22.8% over the price on March 3. This is the result of dividing $1.46
by 2.48%. The result is $58.87 per share.
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