Today I decided to sell all 200 shares of Intel for $34.57 which nets me $6889.09 after commisions. This will decrease my yearly dividends by $180.00.
After yet another $.225 dividend was declared this morning I felt the need to pull the trigger. Owning a 2.6% yielding stock with no dividend growth does not seem like a prudent decision.
From a performance standpoint, Intel has actually has dominated the other Dow components so far this year. It is up an amazing 32% while the next best performer, Microsoft is up just under 20%. The DJIA has barely moved 3% this year.
I actually believed Intel would raise the dividend this quarter after a great earnings season with good future guidance. Intel may very well continue rising to $40 a share or higher, but I am looking to reach FI as soon as possible. This means I will welcome low yielders with high dividend growth as well as high yielders with slow growth. Low yielding stocks with no growth are classified as speculative investments in my book and are not aligned with my philosopy or long term goals.
I have not decided where to allocate the proceeds, but I still like MSFT, CSCO, and IBM in the tech space and may add to these positions. I really feel good about their commitment to continue raising dividends going forward. I also still need to create positions in JNJ, XOM, and MCD. I will have to think about this for a little while.
Grats on the share run up. Yes the hard part is figuring where to allocate the sale to!
ReplyDeleteAG,
DeleteI was hoping Intel would raise the dividend, but they didn't so I am going to take my 60% gain and reinvest it into something with a better yield or better dividend growth prospects.
MDP
selling is fine, but if your intent is to put it into the market why not wait until your pondering of the next stock is complete and then sell INTC buy new guy?
ReplyDeleteWhile I am not happy INTC has not raised the divi, I am about 4.5% on cost and like their growth prospects. I would sell if there was something with high yield and great growth but until then, I plan on staying long.
tuliptown,
DeleteThanks for the comment. I too have a yield on cost over 4%. Unfortunately my yield on current value was only 2.6% with no increase. If I want 2.6% without future increases I could simply buy the 10 year bond. Intel's stock price may increase and that would be great, but I am looking for the best way to allocate capital to produce current and future income. If I continue holding Intel simply for potential price appreciation, then I become more of a speculator than and income investor.
Personally I would rather just buy more shares of T or HCP knowing my income would double immediately and then rise over time. Procter and Exxon also have higher yields than Intel and most likely will continue to deliver higher future dividends. These are more suitable for my FI goals.
I guess I just don't want to buy a stock and then hope its price appreciates to meet my future goals. If I did then Amazon, Netflix, and Google would be on my radar.
MDP
I personally not a big fan of Intel. I just do not see much future in this stock unless they will come up with some new and bright product. which everybody would love. Plus dividends are low. But this is my personal opinion.
ReplyDeleteI also nominated you for Liebster award on my blog page. I hope you will accept it.
HHWG,
DeleteI was hoping Intel would surprise everyone with a 15-20% increase, but it did not happen. I'll look for other opportunities this week. I'll have to stop by blog and check it out.
MDP
I got fed up with the lack of increases earlier this year and sold out. Of course that was about $8 per share ago. I got out a bit early but they just didn't seem committed to the dividend and I was tired of hearing the same thing from management every quarter. Seems like it was always "well we had this issue or this delay and that pushed things back but next quarter will be great" and then they just repeated that each quarter.
ReplyDeletePIP,
DeleteI am definitely not a market timer and got lucky that Intel was on a major run while simultaneously maintaining its dividend all year. I would rather have received a dividend raise and kept the shares. Oh well if the yield gets back to 3.5% or better I will take another look at Intel. Meanwhile, I'll take my gain and reinvest it in more traditional dividend companies.
Thanks for the comment.
MDP
MDP,
ReplyDeleteI'm with JC. I sold out too early, but I don't regret my decision one bit. There was a lot of "woulda, shoulda, coulda" commentary going on with management, and it was always "tomorrow". Meanwhile, there appeared to be no commitment to increasing the dividend, and no communication on it. I did well with the reinvested capital, so I'm happy.
Good luck figuring out where to invest that capital now. Shopping is half the fun. :)
Best wishes!
DM,
DeleteI will probably initiate a new position or two and add to current holdings. PM, PG, and GE look pretty good at these levels.
MDP
MDP,
ReplyDeleteVery nice gain. You made a great choice selling out at the high point. Are you still married to the idea of investing in a tech stock? They personally aren't my favorite, but its a personal preference. MCD was down 5% and I am keeping a very close eye on the stock. Glad to see it is on your watch list!
You can't go wrong with any of the companies you are looking into. I am excited to see which company you select.
Bert
Bert,
DeleteIt will be interesting to see how Intel does going forward. The company actually looks like it is heading in the right direction. If the yield gets back over 3.5% I may revisit it in the future. MCD looks interesting here as well as Boeing and Deere. I'll put the money back to work during the next week or so. Thanks for the comment!
MDP
I like the move. I sold off the majority of my shares earlier in the year and just had the remainder called away. I also was thinking they would raise their dividend this time. That's a big reason I sold. I don't want companies in my portfolio that don't have policies of raising dividends each year. I can understand maybe freezing in bad times but INTC has plenty of cash for a raise.
ReplyDeleteThanks Brent. I am not opposed to owning Intel in the future, but I need to see a much higher entry yield or a commitment to raising the dividend.
DeleteMDP
I've been thinking about trimming my Intel position for a few weeks now. I might trim down to half and use the proceed to buy stocks like JNJ to lower my portfolio weighing on technology sector.
ReplyDeleteTawcan,
DeleteJNJ is a company I need to invest in as well. I'm not a big "buy and sell" guy so I hated selling Intel, but the lack of dividend growth combined with a large gain made it easier for me.
MDP
It is a huge sale. Intel is one of the leading giants in share market, therefore it might be a good move to purchase its shares.
ReplyDeleteEpic Research,
DeleteI agree that this was a big sale and I really would have liked to keep Intel. I bought in at close to 4% yield and due to appreciation, I sold at rougly 2.6% yield. After many quarters without a raise I decided to reallocate and ended up buying shares of KRFT and AFL. Both have been performing better than INTC so far, but I will look at INTC at 3.5% or higher.
Thanks for the comment.
MDP
Thanks
ReplyDeleteShare business is highly complicated. Figuring out right decision is crucial in terms of finding the right place to allocate. Hopefully you've found the perfect place to allocate the sale. I would also add that PanXpan's sales pipeline module is a free way to share and analyze your sales pipeline.
ReplyDelete