INTC Free Cash Flow (Annual) data by YCharts .
In particular, both net income and free cash flow have jumped in the years since the financial crisis, with volatile movements from year to year masking, in some ways, Intel's overall upward trend. As revenue has grown, Intel has ensured that more money falls through to its bottom line, supporting its profitability, its return of shareholder capital through buybacks and dividends, and its positive overall cash flow.
INTC Repurchase of Capital Stock (Annual) data by YCharts .
Intel hasn't given up entirely on its efforts to balance its capital-allocation moves, as it continues to pay a solid dividend that equates to a 2.7% yield. Moreover, with only modest amounts of debt on its balance sheet, Intel has plenty of room to load up on stock buybacks. Nevertheless, investors should watch to make sure Intel shows at least some restraint in buying back stock if share prices keep climbing.
3. Intel isn't skimping on capital expenditures.
Perhaps in response to the fact that it has fallen behind in the mobile revolution, Intel has boosted the amount it spends on capital expenditures . In 2011, Intel essentially doubled its capex from $5.2 billion to $10.8 billion, and the company has kept its spending levels in the same general neighborhood ever since.
Source: Intel.
The fact is, Intel has a lot to spend money on. Efforts to get its chips into tens of millions of tablets will require substantial new spending, and Intel also wants to increase its commitment to cloud-based data centers and the Internet of Things initiative. Through both capex and spending on research and development, Intel hopes it can catch up with Qualcomm, NVIDIA, and other players in the space and regain undisputed leadership of the industry.
Watch out for Intel's cash flow
From a cash flow perspective, Intel looks just as solid as it does looking at its other fundamentals. The chip giant has a long way to go to regain its past momentum, but Intel shouldnevertheless have investors excited about its potential to generate more cash well into the future.
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The article Cash Flow Analysis on Intel Stock: 3 Things Every Shareholder Should Know originally appeared on Fool.com.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Intel and Nvidia. The Motley Fool owns shares of Intel and Qualcomm. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
