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Dividend Idea of the Week: Intel Offers a Yield of 4.23% and 26.94% Upside

Our weekly Dividend Idea is the leading technology and semiconductor company, Intel Corp. (INTC). Intel designs and manufactures integrated digital technology platforms. A platform consists of a microprocessor and chipset. The company sells these platforms primarily to original equipment manufacturers, original design manufacturers and industrial and communications equipment manufacturers in the computing and communications industries. The company's platforms are used in a range of applications, such as personal computers, data centers, tablets, smartphones, automobiles, automated factory systems and medical devices.

We like the company due to its high market share within the semiconductor industry (the biggest rival is Texas Instruments (TXN) with a market capitalization of $32 billion, one-third the valuation of Intel). The stock is a basic investment for technology investors with one of the most attractive dividend yields within the sector. The company is acting in a very cyclic industry but has a beta ratio of only 1.06. Despite the fact that the company is near one-year lows, we believe that the sell-off could go on due to recession items. Another big burden is the low market share in the fast-growing smartphone market. Intel raised dividends for nine consecutive years (Dividend Challenger) and has a long-term dividend growth rate over 25 percent. The company serves $10.5 billion on cash and short-term investments at $7.2 billion debt. The strong operating cash flow (EBITDA of $23.2 billion) leads to an investment payback of 4.4 years.

These are the main competitors from the broadline industry:

STMicroelectronics (STM) has a market capitalization of $5.44 billion. The company generates revenue of $9,735.00 million and has a net income of $1.55 billion. The firm's EBITDA amounts to $1.64 billion. The EBITDA margin is 16.80% (the operating margin is 3.74% and the net profit margin 1.59%).

The total debt represents 12.95% of the company's assets and the total debt in relation to the equity amounts to 20.60%. Last fiscal year, a return on equity of8.56% was realized. Twelve trailing months earnings per share reached a value of $0.15. Last fiscal year, the company paid $0.40 in the form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 41.91, the Price/Sales is 0.58 and the Price/Book ratio is 0.71. The dividend yield is 6.53%. The beta ratio is 1.80.

Maxim Integrated Products (MXIM) has a market capitalization of $7.78 billion. The company generates revenue of $2.4 billion and has a net income of $3.55 billion. The firm's EBITDA amounts to $743.63 million. The EBITDA margin is 30.94% (operating margin 22.25% and net profit margin 14.77%).

The total debt represents 8.27% of the company's assets and the total debt in relation to the equity amounts to 12.18%. Last fiscal year, a return on equity of 14.06% was realized. Twelve trailing months earnings per share reached a value of $1.18. Last fiscal year, the company paid $0.88 in the form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 22.53, the P/S ratio is 3.24 and the P/B ratio is 3.07. The dividend yield is 3.60%. The beta ratio is 1.15.

Texas Instruments (TXN) has a market capitalization of $31.64 billion. The company generates revenue of $13.74 billion and has a net income of $2,236.00 million. The firm's EBITDA amounts to $4 billion. The EBITDA margin is 29.17% (the operating margin is 21.78% and the net profit margin is 16.28%).

The total debt represents 27.28% of the company's assets and the total debt in relation to the equity amounts to 51.06%. Last fiscal year, a return on equity of 20.58% was realized. Twelve trailing months earnings per share reached a value of $1.37. Last fiscal year, the company paid $0.56 in the form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 20.32, the P/S ratio is 2.30 and the P/B ratio is 2.89. The dividend yield is 3.02%. The beta ratio is 1.09.

Avago Technologies (AVGO) has a market capitalization of $8.13 billion. The company generates a revenue of $2.34 billion and has a net income of $5.52 billion. The firm's EBITDA amounts to $7.21 billion. The EBITDA margin is 30.86% (the operating margin 24.14% and the net profit margin 23.63%).

The total debt represents 0.25% of the company's assets and the total debt in relation to the equity amounts to 0.30%. Last fiscal year, a return on equity of 31.44% was realized. Twelve trailing months earnings per share reached a value of $2.23. Last fiscal year, the company paid $0.35 in the form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 14.90, P/S ratio is 3.48 and the P/B ratio is 4.07. The dividend yield is 1.93%. The beta ratio is not calculable.

NXP Semiconductors (NXPI) has a market capitalization of $5.50 billion. The company generates revenue of $4.19 billion and has a net income of $79 billion. The firm's EBITDA amounts to $9.16 billion. The EBITDA margin is 21.84% (operating margin 7.75% and net profit margin 1.88%).

The total debt represents 57.46% of the company's assets and the total debt in relation to the equity amounts to 331.79%. Last fiscal year, a return on equity of 4.13% was realized. Twelve trailing months earnings per share reached a value of $1.69. Last fiscal year, the company paid $0.00 in form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is not calculable, P/S ratio is 1.32 and the P/B ratio is 4.81. The dividend yield is zero percent. The beta ratio is not calculable.

Watch out the free full research report from Intel here.

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* I have no positions in Intel. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.

For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

The stock analysis, including the rating and up/down potential, is based on historical information and provided by several data provider like Thompson Reuters, Morningstar, GoogleFinance, Yahoo! Finance and MSN. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Material presented here is for informational purposes only. Before buying or selling a security, you should do your own research and reach your own conclusion.

Weekly Dividend Stock Ideas Researched by The Dividend Yield Weekly.

About the author:

Dividend
I am a private full time investor searching for investments and investment ideas.

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Rating: 3.3/5 (11 votes)

Comments

varunfriend
Varunfriend premium member - 1 year ago


2 more competitors ... AMD (for PC sector) and ARM Holdings (for mobile sector)

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