Intel Corporation (INTC) today announced a 16% increase in its quarterly dividend rate, to 21 cents a share, from 18 cents. That raises the yearly rate to 84 cents, to get an annual yield of 3.6%. That’s the second dividend hike in six months ; the world’s largest chipmaker upped the rate by 15% in November 12, 2010.
“Worldwide demand for computing continues to increase at a very rapid rate, putting Intel on track for revenue growth of over 20 percent this year, delivering another record year for the company,” CEO Paul Otellini said in a statement. “Intel’s current and projected growth is generating strong cash flow, allowing us to further increase our dividend. We are delivering on our commitment to return cash to shareholders with annual dividend growth that’s already more than five times the S&P 500.”
Intel’s dividend has steadily increased at a 33% compound annual growth rate since fiscal 2003, compared to the S&P 500 growth rate of 6% over the same period. Intel began paying a cash dividend in 1992 and has paid out approx. $22 billion to its investors ; for 2010 dividend payments totaled about $3.5 billion.
Santa Clara-based Intel said the dividend increase will begin in the third quarter.
Intel also said it increased the authorization limit for share repurchases by an additional $10 billion in January, extending the overall outstanding buyback authorization to $14.2 billion. In the first quarter of 2011, Intel used $4 billion of the total buyback authorization to repurchase shares.
Shares of INTC added 53 cents to $23.57 at 11:35 a.m. EDT on the Nasdaq Stock Market. The stock had gained nearly 10% this year as of yesterday.