Friday File: “The Ultimate Dividend Stock for 2013 (and FOREVER)”

Looking at (and buying) Jim Nelson's "Gun to my head, this is the ONE stock I'd recommend..." pick, and selling some of a core holding.

By Travis Johnson, Stock Gumshoe, March 8, 2013


Today I’ve got a teaser to decipher for you (that’s where our florid headline comes from today), and some shuttling around in my personal portfolio that is actually related to the stock being teased.

To give it to you straight and sweet up front, since you’re one of my favorite people: Jim Nelson is teasing Intel as the “The Ultimate Dividend Stock for 2013 (and FOREVER)” for his new Income & Dividend Report, and I also just sold more than half of my Sprott Resource Lending (SILU) shares and bought some more Intel (INTC) and a touch more Apple (AAPL).

No, I didn’t make the trade because Nelson is teasing Intel, but I want some more Intel in my portfolio at these prices, Sprott Resource Lending reported their quarter last week and worries me a bit, and I do like it when I can wrap a few points up in the same note for you. Nice and tidy.

I’ll go through Nelson’s teaser a bit first — if you’ve been around these parts for a while you already know that I like and own Intel (INTC), though it’s not a stock I write about a lot (it’s been a year or two since I added to this position). Everyone has, after all, heard of them, even if many have pigeonholed Intel as a high-income dinosaur and don’t recognize the extraordinary cash generation capacity and the steady growth potential that Intel still has.

They’re not going to shoot out the lights like Qualcomm (QCOM) has with their mobile chip dominance, but they’re also not priced at 17X earnings with a meager 1.5% dividend yield. I like QCOM, and it’s probably a good pick at these prices too, but I’ve unfortunately not ever gotten around to owning it and I can’t confidently call it “cheap” or get much compounding power from a 1.5% yield.

So now that I’ve let the cat out of the bag that this tease is for Intel, let’s listen to Jim Nelson’s reasoning about why we should buy it:

“I call it the ultimate dividend stock for 2013, and forever.

“Why?

“Actually, there are two reasons:

“First, an unstoppable explosion of demand for this company’s product could send its share price sky-high as soon as next year.

“Second, this company pays a generous dividend and has increased its payout every single year since ...

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