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Shares of chip maker Intel (NASDAQ:INTC) rose on Wednesday, closing near their 52-week high set just yesterday. Intel has shown a lot of strength lately, and despite being at yearly highs, can still be a winning investment. Here's why.

Stock Shakes off Warning:

On the morning of December 12th, Intel warned that its fiscal fourth quarter revenues would fall short due to hard drive shortages caused by recent flooding in Asia. The stock fell 4% that day, and hit a bottom one week later at $23.05. Since that point, Intel has risen $2.75, or nearly 12%. Not only has the stock erased its losses from the warning, it is actually up since it warned. In fact, Intel has outperformed both the Nasdaq 100 ETF (NASDAQ:QQQ) by 5% and the S&P 500 Technology Sector SPDR ETF (NYSEARCA:XLK) by 6%.

Intel's revenue estimates have come down to the midpoint of its lowered range. Also, its earnings per share numbers have come down to $0.61 from a recent high of $0.70. It's quite possible that Intel could beat its lowered expectations. Intel said that problems could linger into early 2012, but the company expects a rebound throughout the rest of the year. 2012 earnings per share estimates have dropped from $2.56 to $2.38, and I think that's too much. Intel will find a way to beat those numbers.

The Dividend:

Intel sports a 3.26% dividend yield currently, one of the highest in tech land-- even higher than Microsoft (NASDAQ:MSFT), which also boosts a nice payout. Over the past five years, Intel's dividend has grown by an average of 16%. The high yield and excellent growth rate gave Intel the top spot on my value picks for 2012 list. Intel's dividend is 50% higher than it was just two years ago, and more than double the rate that the company was paying out as late as November of 2006.

The Buyback Program:

In addition to a nice dividend, Intel is actively buying back stock, and lots of it. Intel purchased $4 billion of its shares in the third quarter alone, which gave it a total of $10 billion in repurchases through the first nine months of 2011. It is currently buying back a lot more stock than Microsoft, and with $100 billion less in market cap, its money goes further. As of the end of the third quarter, Intel had $14 billion left on its current repurchase program, which includes the $10 billion increase in the program announced a few months ago. Since 1990, the company has bought back almost 4 billion shares. It has spent $80 billion on buybacks, and that number will only increase as time goes on. This will only help the company boost its earnings per share numbers.

Market Domination:

Intel still dominates the markets, and is much bigger than its two main competitors, AMD (NASDAQ:AMD) and Arm Holdings (NASDAQ:ARMH). Intel boasts the highest operating margins of all three, and has the lowest price to earnings growth rate ratio. Arm Holdings boasts the highest potential growth in both revenues and earnings going forward, but at such a lofty valuation, you are paying just way to much for it. Arm also pays a very small dividend, less than half a percent, and AMD does not pay a dividend at all. Neither of the two are currently buying back stock, meaning Intel gives you a much better value.

Conclusion:

Despite the stock being at a 52-week high, you can still find value in this investment. The company sports a very high dividend for its industry, as well as buying back plenty of stock. The name has remained strong, despite issuing a revenue warning last month. Expectations have come down, as you would expect, but I think the name is set up to beat estimates in 2012. Intel was my top value pick for 2012, and I think there are plenty of reasons to continue buying this stock.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Intel At New High, But Bull Case Still Intact