Intel Signals Trend In Rising Use Of Cash, Says UBS

[Joanne98]

Source: Barrons

UBS Securities analyst Uche Orji today reiterates a Buy rating on Intel (INTC) shares in the wake of the company’s announcement this morning it is adding $10 billion to its share buyback authorization, bringing the total repurchase authorization to $14 billion.

Orji estimates that combining Intel’s big bump-up in capital expenditures to $9 billion this year, dividends plus buybacks should increase the company’s “total cash deployment” to 30% of 2011’s estimated sales, which would be higher than the 24% rate last year.

He also writes that Intel’s action today reinforces his expectations that cash deployment will rise this year across the semiconductor industry, as it was at a ten-year low at the end of 2010, by his estimate, even as cash generation hit a 10-year high. Orji sees several companies increasing their use of cash, including Altera (ALTR), Broadcom (BRCM), Cypress Semiconductor (CY), LSI (LSI), Microchip Technology (MCHP), Marvell Technology Group (MRVL), Analog Devices (ADI), Maxim Integrated Products (MXIM), National Semiconductor (NSM), Nvidia (NVDA), ON Semiconductor (ONNN), RF Micro Devices (RFMD), Texas Instruments (TXN), and Xilinx (XLNX).

As for Intel, its shares satisfy value investing criteria, he notes: 3.5% dividend yield, sub-10 times P/E based on 2011 estimates, free cash flow margin of 19% and free cash flow yield of 8%. The main worry, that ARM Holdings (ARMH) will cause trouble for Intel in the smartphone and tablet market, is already priced into the shares, he writes.



Read more: http://blogs.barrons.com/techtraderdaily/2011/01/24/intel-ubs-sees-trend-in-rising-cash-use/

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This is more than an article about Intel. It's an article about what corporations are going to do with all the cash they're sitting on.

I've been saying for a couple of months now that they are NOT going to create jobs, they are going to give the cash to their SHAREHOLDERS!

Cash deployment= NO JOBS

This is important because they're asking for a TAX CUT right now so they can (LOL) create jobs. They have NO intention of creating jobs. If they did they wouldn't be INCREASING DIVIDEND PAYOUTS!

[Joanne98]

1. They're having a dividend party!

Intel's dividend declaration and strong earnings by McDonald's gave positive momentum to the market today. Dow Jones Industrial Average added 0.57 percent or 67.36 points to 11,939.20. NASDAQ Composite index was up 0.67 percent or 18.10 points to 2,707.64, and the Standard and Poor's 500 index gained 0.38 percent or 4.86 points to 1,288.21.

Besides Intel, few other companies have also declared their annual and quarterly dividend plans boosting up investors' confidence.

Intel Corporation (NASDAQ: INTC) gained 1.06 percent or $0.22 to $21.04 in the morning as the company rose its quarterly dividend by 15 percent to 18.12 cents per share.

Twin Disc Incorporated (NASDAQ: TWIN) has raised its quarterly dividend by 14 percent to $0.08 per share. Shares of the company rose 1.41 percent or $0.40 to $28.81 after the news.

PriceSmart Inc. (NASDAQ: PSMT) has declared a cash dividend of $0.60 per share, $0.30 per share payable on February 28, 2011 to shareholders of record on February 15, 2011, and $0.30 per share payable on August 31, 2011 to shareholders of record on August 15, 2011.

General Electric Company (NYSE: GE) is expected to raise its annual dividend to 80 cents per share. Shares of the company were up 1.04 percent or $0.21 to $19.95 in the initial hours.

Family Dollar Stores Inc. (NYSE: FDO) lost 0.87 percent or $0.38 to $43.42 today. The company plans to raise its quarterly dividend by 16.1 percent to 18 cents per share, payable on April 15, 2011 to shareholders of record on March 15, 2011.

Merchants Bancshares Inc. (NASDAQ: MBVT) has decided to pay a dividend of 28 cents per share on February 17, 2011, to shareholders of record on February 3, 2011.

Sierra Bancorp (NASDAQ: BSRR) plans to pay a regular quarterly cash dividend of $0.06 per share on February 15, 2011 to shareholders of record on February 1, 2011.

Shares of Berkshire Hathaway (NYSE: BRK.A) added 2.78 percent or $3,355 to $123,881 amid reports that the company may soon start paying a dividend.

http://www.istockanalyst.com/article/viewarticle/articleid/4830259

[leveymg]

2. No jobs, just more for stockholders (and company officers with stock options).

The multinationals were responsible for twice as many job eliminations as truly US-based companies since the recession started. The shedding of jobs and offshoring gave them enormous cash reserves. Now we know they won't be reopening US plants and offices.

There oughta be a law.

[bluesmail]

3. It's a big party that 'little' peple aren't invited to. Keeping it in

'the family'.

[Boojatta]

4. "they are going to give the cash to their SHAREHOLDERS!"

Shareholders are owners. Wouldn't you expect rent money paid by a tenant to go to the owner of the property?

Obviously a promise that isn't written into law and isn't part of any contract is also not enforceable. Thus, a promise that a tax cut would be used to create jobs would be an unenforceable promise.