Intel's dividend cut gets just a shrug from chip giant's shareholders
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Intel (NASDAQ:INTC) shares put in a ho-hum performance Wednesday as investors didn't appear too fazed by the semiconductor giant slashing its stock-dividend payouts.
Before the start of trading, Intel (INTC) said it was cutting its quarterly dividend to 12.5 cents a share from its earlier payment of 36.5 cents a share. The company said in a statement that it was cutting its dividend payments as part of a "deliberate approach to capital allocation [that] is designed to best position the company to create long-term value."
Along with Intel's (INTC) dividend cut, Chief Executive Pat Gelsinger said, "Prudent allocation of our ownersâ capital is important" as the company follows its IDM 2.0 strategy in order to "sustain our momentum as we rebuild our execution engine."
Despite seeing their dividends get cut down, investors remained lukewarm toward Intel (INTC) as trading progressed, as Intel (INTC) shares gave up less than 1%, to trade at $25.92, and are now down about 2% since the end of 2022.
Intel (INTC) shares took a beating in January when the company reported disappointing fourth-quarter results and gave a business outlook that shocked Wall Street. On Wednesday, Intel (INTC) reiterated its first-quarter forecast for a loss of 15 cents a share, excluding one-time items, on revenue in a range of $10.5 billion to $11.5 billion.
Seeking Alpha contributor Trapping Value said that Intel's (INTC) dividend cut will likely do little to keep the company's shares from losing more value as the year goes on.