Intel (INTC) has had a nice run since the market lows of last summer. It is up some 35% since September. However, based on valuation, growth prospects and its dividend yield; it still looks like it has upside. The company is one of few technology stocks that provide a generous dividend as well as solid growth prospects. In many ways, it reminds me very much of Microsoft (MSFT) which has the same characteristics.
Some recent highlights from Intel:
- Announced they are raising their dividend by 7%.
- It should benefit when Microsoft releases Windows 8 later in the year.
- It was recently named the Top Dividend Stock in the NASDAQ 100.
- Consensus earnings estimates have moved up smartly in the last two months for FY2012 and FY2013.
4 reasons Intel still offers value at just under $28 a share:
- The stock now yields over 3.1%, has an A+ rated balance sheet and has doubled its dividend payout over the past five years.
- INTC has a forward PE of 10.4, a significant discount to its five year average (15.5).
- The company has beat quarterly earnings estimates for the last six quarters. The average beat over consensus during that time span is north of 9%.
- The stock has a low five year projected PEG (.95) for a stock yielding over three percent, has over $6B of net cash on the books and sells for less than seven times operating cash flow.
