Current Dividend Yield: 3.8%
Performance So Far in 2012: -3%
You might be surprised to see a tech stock like Intel (NASDAQ:INTC) on this list — and even more shocked to see the big headline yield! But tech stocks are increasingly paying dividends (I’m looking at you, Apple (NASDAQ:AAPL), and Dow components are no exception. In fact, in addition to Intel, Dow component Cisco (NASDAQ:CSCO) almost made this list with a 2.9% yield that barely missed the cut.
But back to Intel: The dividend yield is a product both of increasing distributions — its recent bump from 21 cents to 23 cents a quarter boosted the yield — and unfortunate share price declines. The company recently was bumped from Warren Buffett’s holdings in Berkshire Hathaway (NYSE:BRK.B, BRK.A), and talk of delays over the Windows phone means Intel remains very much behind the curve on mobile chip sales.
However, it’s hard to bet against INTC in the long term. A 3.8% yield makes this Dow component and top dividend payer attractive, but it’s also very much at the heart of the information age. Yes, Intel is suffering as PC sales dwindle — but as the world’s largest semiconductor manufacturer, it’s foolish to think that because laptops are becoming obsolete, this company is too. INTC has its fingers in many electronic pies, and is making a big push into mobile that certainly will pay off later. Intel is focusing on mobile semiconductors and Ultrabook sales to fill in any lost ground.
It’s also worth noting that INTC, like others on this list, is a cyclical stock — without consumer demand for electronics or businesses buying new hardware, INTC is going to see headwinds. That means you might want to get in now and enjoy the nice dividend in anticipation of a longer-term recovery and mobile revenue stream.