10/21/2012

Dividend Idea Of The Week: Intel (NYSE:INTC) Offers A Yield Of 4.23% At 26.94% Upside Potential

Weekly Dividend Stock Ideas Researched by The Dividend Yield Weekly. Our weekly Dividend Idea is the leading technology and semiconductor company Intel Corporation (NYSE:INTC). Intel Corporation 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 (OEMs), original design manufacturers (ODMs), 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 (PCs) (including Ultrabook systems), data centers, tablets, smartphones, automobiles, automated factory systems and medical devices. On February 2012, QLogic Corp. sold the product lines and certain assets associated with its InfiniBand business to the Company. In May 2012, Cray Inc. completed the sale of its interconnect hardware development program and related intellectual property to the Company. In September 2012, InterDigital, Inc.’s subsidiaries sold around 1,700 patents and patent applications to the Company. More on Reuters here

We like the company due to the high market share within the semiconductor industry (The biggest rival is Texas Instruments with a market capitalization of $32 billion, one third from 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 very fast growing Smartphone market. Intel raised dividends for 9 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 competitors:


STMicroelectronics (STM) has a market capitalization of $5.44Billion. The company generates revenue of $9,735.00 million and has a net income of $155.00 million. The firm’s EBITDA amounts to $1,635.00 million. The EBITDA margin is 16.80% (operating margin 3.74% and 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 of 8.56% was realized. Twelve trailing months earnings per share reached a value of $0.15. Last fiscal year, the company paid $0.40 in form of dividends to shareholders.

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

Maxim Integrated Products (MXIM) has a market capitalization of $7.78Billion. The company generates revenue of $2,403.53 million and has a net income of $354.92 million. 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 form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 22.53, Price/Sales 3.24 and Price/Book ratio 3.07. Dividend Yield: 3.60%. The beta ratio is 1.15.

Texas Instruments (TXN) has a market capitalization of $31.64Billion. The company generates revenue of $13,735.00 million and has a net income of $2,236.00 million. The firm’s EBITDA amounts to $4,007.00 million. The EBITDA margin is 29.17% (operating margin 21.78% and net profit margin 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 form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 20.32, Price/Sales 2.30 and Price/Book ratio 2.89. Dividend Yield: 3.02%. The beta ratio is 1.09.


Avago Technologies (AVGO) has a market capitalization of $8.13Billion. The company generates revenue of $2,336.00 million and has a net income of $552.00 million. The firm’s EBITDA amounts to $721.00 million. The EBITDA margin is 30.86% (operating margin 24.14% and 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 form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 14.90, Price/Sales 3.48 and Price/Book ratio 4.07. Dividend Yield: 1.93%. The beta ratio is not calculable.

NXP Semiconductors (NXPI) has a market capitalization of $5.50Billion. The company generates revenue of $4,194.00 million and has a net income of $79.00 million. The firm’s EBITDA amounts to $916.00 million. 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, Price/Sales 1.32 and Price/Book ratio 4.81. Dividend Yield: None%. The beta ratio is not calculable.

Here is the full research report from Intel:



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* I have no positions in INTC. 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, YahooFinance 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.

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