2022 has been a tough year for investors.of S&P 500 Market indices are down more than 30% year-to-date, fueling growth sentiment. NASDAQ Composite I lost over 30% over the same span. Among these extensive market trackers, many stocks have been hit even harder.
On the positive side, negative market trends have created some great buying opportunities. This is especially true in the tech sector, which tends to exaggerate trends occurring in the general stock market. But wait. There is even better news. Given the price-based calculation of dividends, dividend yields tend to rise as stock prices fall.
Taken together, these two effects make me want to discuss investing. intel (INTC -5.37%) When International office equipment (IBM -2.79%) just now. These top quality companies saw their prices drop significantly in 2022, pushing cash dividends to new heights.
Intel Turnaround Story: 5.7% Dividend Yield
Semiconductor giant Intel’s latest earnings report was certainly a disappointment. The company underperformed Wall Street estimates on both the top and bottom lines, and management admitted that the results fell short of his own Intel expectations, partly due to execution issues. The stock has fallen 35% since that fateful report, well below his 11% decline in the S&P 500 over the same period.
Today, Intel’s stock is trading at its lowest price/earnings ratio since the early 1990s. The dividend yield is a very generous 5.6%, the highest in Intel’s 30-year dividend history.
These anomalous metrics can be seen as red flags that Intel is out of power. But I see a golden opportunity to get and lock in an incredible dividend yield in a unique turnaround story.
Processor design cycles tend to take three to five years. Intel appointed a new CEO in his 2021, after which he revamped his entire management structure to his liking. CEO Pat Gelsinger is still haunted by his predecessor’s decision-making and product development, and no real improvement in Intel’s long-term business plans will come to him until 2024. Challenges for America and the global economy.
Intel’s business prospects are brighter than ever in the long term. Gelsinger is an engineer at heart, and in scandalous haste he replaced a financial expert who had to enlist the help of Intel. It makes sense that former CEO Bob Swan made some operational mistakes, and I’m fully confident that given enough time, Gelsinger could right the ship.
On top of that, Intel has started making chips for other companies, investing billions in expanded chip manufacturing facilities. The cash machine looks as healthy as ever, and Intel remains committed to returning a significant portion of its cash to shareholders in the form of dividends. You should jump at the chance to see the yield.
IBM’s Artificial Intelligence Focus: 5.6% Dividend Yield
Big Blue’s high dividend yield isn’t a company record, but you can find only a handful of richer quarterly checks among the S&P 500 tickers. And if you narrow your search down to technology names in the S&P 500, only Intel beats IBM in yields today. Here we are looking at the elite of the technology sector dividend payers.
The company began its transition from hardware to software and services ten years ago. Today, IBM is a giant in hybrid cloud services and artificial intelligence (AI) tools. The current platform was rebuilt around his $34 billion acquisition by Red Hat in 2019.
IBM’s revenue increased 16% year-over-year, according to its second-quarter report for July. Hybrid cloud sales are growing even faster, and now more than 70% of his total IBM revenue comes from software and consulting. This centenary giant has transformed himself into a high-growth phenomenon with direct exposure to the pulse of the computing market’s greatest growth opportunity.
Still, the stock fell 13% in 2022 as investors avoided growth stocks in favor of ultra-safe value havens. In my eyes, IBM looks like it offers high-octane growth opportunities from a solid financial platform. It’s the best of both worlds and appeals equally to growth and value investors.
These High Yielding Household Names Are For Sale
These two companies take annual dividend increases very seriously.
INTC Dividends Paid (TTM) data by YCharts
IBM and Intel stocks have taken a significant haircut in 2022, largely due to the challenges facing the wider economy. Falling stock prices have given their stocks attractive dividend yields, and buying today can lock in those high yields for the long term. is an excellent way to build
Anders Bylund has held positions at IBM and Intel. The Motley Fool has a position with and recommends Intel. The Motley Fool made a long Intel Jan 2023 $57.50 call, Intel Jan 2025 long call $45, Intel Jan 2023 short put at $57.50, Intel Jan 2025 short put. We recommend short puts of $45 per month. The Motley Fool’s U.S. headquarters has a disclosure policy.