Intel Slashes Dividend 66% to Lowest Payout in 16 Years

According to a Wednesday statement, the company will cut its quarterly dividend to investors to 12.5c per share. This payment is due June 1, according to the chipmaker. The current quarterly dividend from Intel is 36.5cs. It was expected to cost over $6 billion by 2023. Intel stated in a statement that the decision to reduce the quarterly dividend was a result of the board's deliberate approach towards capital allocation. It is intended to position the company to create long term value. Intel's earnings report last month predicted one of its worst quarters since its inception. This is because a slowdown for personal-computer sales has ravaged the semiconductor industry. Intel has been spending heavily in an effort to regain its position as a leader in the market despite the turmoil. It has taken a significant hit due to losing market share to its rivals. Intel's ability to reduce its dividends to shareholders will hurt it in an increasingly competitive market for chipmakers that offer higher returns. Companies in the industry have historically not paid dividends due to the volatility of cashflows during large swings between shortages and gluts in the over $500 billion industry. Intel's current dividend yield is greater than 5%. This figure is calculated by multiplying the annual payout by stock price. It dwarfs the other chipmaker peers. In 1992, the company paid its first dividend and has continued to increase it since. Gelsinger stated that the company is committed to increasing its dividend in the future, if circumstances permit. He said that while the company will be reducing its capital expenditure, it won't impact investment in production technology. Separately, the company reaffirmed its forecasts for current quarter given in January. Intel will also reduce its budget this year for new equipment and plants. It announced Wednesday that the company plans to spend 30% of its revenue. Zantac's maker kept silent for 40 years about cancer risks
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