Historical data is very clear. When the dividend is cut, it’s time to sell.
Dividend growth stocks have outperformed dividend cutters 18 times over the last 50 years. It’s the difference between $1 becoming $17 adjusted for inflation, or $0.94.
Intel has been struggling for years with its turnaround efforts and is now on its 2nd attempt in as many years.
Intel slashed its dividend by 66%, and analysts expect -$25 billion in free cash flow through 2025 to cause it to cut the dividend twice more, a total of 24%.
Intel’s turnaround is expected to succeed, but analysts expect only bond-like 5% long-term total returns.
In fact, bonds have outperformed Intel for the last 20 years.
And Intel has underperformed the chip sector for 22 years.
It’s time to bid farewell to Intel and buy two high-yield dividend aristocrat bargains before the recession hammers Intel even more.