Portfolio Update
The FiveTwenty portfolio received $64.80 in dividends in the past week. TROW paid its quarterly dividend during the week.
| Past Week Dividend | $64.80 |
| Current Quarter Dividend (Q3 2022) | $1,688.12 |
| LifeTime Dividend | $6,295.28 |
| Estimated Annual Dividend | $6,535.48 |
The capital allocation for the week of 10/02/2022 to 10/08/2022 will be used to add to our position in Intel Corp (NYSE: INTC)
INTC – Position Update
Since our last check-in on INTC in week 5 of 2022, the company reported Q1 2022 earnings on 04/28/2022, and Q2 2022 earning of 07/28/2022. In addition, the share price decreased 46% from $47.73 to $25.77 during the period.
| TTM | Prev. Update | 10-year median | |
| Dividend Streak | 8 years | 8 years | |
| Yield | 5.60% | 2.91% | 2.84% |
| Payout Ratio | 36.43%1 | 25.41%2 | |
| P/E | 6.511 | 8.732 |
1 computed using TTM adjusted EPS of $3.96 as of Q2 2022
2 computed using TTM adjusted EPS of $5.47 as of Q4 2021
Q2 2022 earnings report
Did INTC’s latest earnings report raise any warning flags?
Due to a slowdown in consumer demand for PCs, INTC’s financial performance in 2022 has been dismal. Q2 2022 has especially been week with revenues for the 2 largest business units, Client Computing Group (CCG) and Datacenter and AI Group (DCAI), declining 25% and 16% respectively. The other business group with revenue decline was the Intel Foundry Services (IFS), the smallest group by revenue, which saw a decline of 54%.
Overall, in Q2 2022 adjusted revenue declined 17%, adjusted net income decreased 79%, and adjusted EPS were 79% lower than in Q2 2021.
| Adj Revenue (in billions) | Adj. Net Income (in billions) | Adj. EPS . | |
| Q2 2021 | $18.5 | $5.6 | $1.36 |
| Q2 2022 | $15.3 | $1.2 | $0.29 |
| % Change | (17)% | (79)% | (79)% |
Looking ahead, the company for casts full year revenue of $65-60 billion, adjusted gross margin of 49% and adjusted EPS of $2.30 per share.
Thesis
Why are we adding to our position in INTC?
The poor financial performance of the company this year on top of the tough market conditions for the tech sector as a whole, has led to a fire sale on INTC shares and has pushed the yield up 5.6%. While the company still has a few challenging quarters ahead, we do believe in its long-term prospects. Therefore, we see the current situation as an opportunity to continue to build our position for the long term.
Previous Articles
- 2022 Week 5: Intel Corp (NASDAQ: INTC)
- 2022 Week 2: Intel Corp (NASDAQ: INTC)
- 2022 Week 1: Intel Corp (NASDAQ: INTC)
Photo by Fotis Fotopoulos on Unsplash