Intel Corp (NASDAQ:INTC)

CAPS Rating: 4 out of 5

Chip giant Intel develops advanced integrated digital technology platforms and components for the computing and communications industries.


Player Avatar ndavis90210 (86.58) Submitted: 9/12/2011 9:35:10 PM : Outperform Start Price: $17.45 INTC Score: +26.67

Intel is the largest processor manufacturer for PCs, servers, and laptops. AMD is a distant second, especially when you consider the quality of the companies' financial statements.

Intel has no trouble turning a profit. AMD is struggling to stay afloat. It had to spin off the foundry portion of its business back in 2008. Now, it's still having problems maintaining positive operating cash flow, and is reliant on a third party to actually manufacture its chips.

Intel's dividend rate has increased monotonically for the past 10 years, and has increased in 4 of the last 5 years. The average yearly increase in dividend rate for the past 5 years was almost 15% (14.51% according to Reuters). AMD does not pay a dividend, and has a retained deficit of almost $5 billion.

Some would argue that mobile computing will cut into Intel's future growth. Let me offer 4 counterpoints:
1. Intel does have mobile offerings of its own (although they tend to be "less mobile" than others)
2. Mobile apps tend to push complex operations onto the server, increasing the demand for server processors
3. As mobile devices become more complex, they will need more powerful chips -- such as the ones Intel offers
4. Intel has a lot of resources to throw at R&D -- I am confident they will adequately adapt to any changes in the marketplace

Intel is a market leader. It has a strong balance sheet, and is generous to its shareholders in the form of dividends. Its high growth days may be over, but I believe it will still continue to grow.

Member Avatar ikkyu2 (99.26) Submitted: 11/19/2011 6:25:33 PM
Recs: 0

Nice pitch. Couldn't agree more. Many others have pointed to slow adoption of Atom as a black mark on Intel's record, but I believe they will eventually carve out share in the mobile space as well.

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