Intel and ETRACS Alerian ETN Hike Dividends
Intel Corp. (NASDAQ: INTC – $35.59) raised its quarterly dividend and updated its business outlook, including expectations for full-year 2015 revenue. The company will now pay a cash dividend of $0.96 per share annually, a six-cent increase, beginning with the first quarter of 2015, which will yield investors about 2.7% at current levels. Intel also said at an investor conference that it expects revenue growth in the mid-single digits and its gross margin percentage at around 62%, plus or minus two points. Capital expenditures are expected to total almost 20% of revenue this year, versus an average of 16% over the past two decades. But that figure should decline starting next year, which should unlock more free cash for dividends and share repurchases. Once criticized for being the last to the table in mobile-related chips, Intel is now one of the leading producers of semiconductors for mobile devices. The shares are undervalued in my opinion and can be held in a well-diversified income account.
UBS Investment Bank announced a fourth quarter coupon payment for the ETRACS Alerian MLP Index ETN (NYSE: AMU – $32.95) of $0.3778 per unit for note holders of record through November 25. The payout is an increase from the previous quarterly rate of $0.3701 and will yield 4.68% on an annualized basis at current quotations. The investment in AMU seeks to replicate the Alerian MLP Index, which measures the performance of 50 prominent energy master limited partnerships that earn the majority of their cash flow from the transportation, storage, processing or production of energy commodities. The shares remain a core income holding.