Is Intel Corporation (INTC) a Good Stock to Buy?

Page 1 of 2

Technology investing is a precarious endeavor these days. Particularly for companies like Intel Corporation (NASDAQ:INTC), which has been called an attractively valued dividend-payer by some, and a dying relic of old technology by others. When discussed in the financial media, whether Intel is on the brink of being technologically obsolete seems to depend simply on which financial pundit is currently speaking.

Intel Corporation (NASDAQ:INTC)

Unfortunately, nobody knows exactly what the future holds, so trying to predict any company’s future is usually an exercise in futility. Intel Corporation (NASDAQ:INTC) spent several months last year languishing under a collapsing stock price, but has shown signs of life more recently. What’s a rational course of action with regard to the semiconductor giant?

Out with the new, in with the old?

For several months last year, Intel Corporation (NASDAQ:INTC)’s stock price collapsed under the weight of pervasive investor pessimism. Intel is part of the ‘old tech’ group, which, including other companies such as Microsoft Corporation (NASDAQ:MSFT), represent companies reliant on the personal computer. Intel’s stock price lost a third of its value between May and December of 2012 after delivering quarterly earnings reports that shook the market’s faith in the semiconductor juggernaut.

Indeed, Intel Corporation (NASDAQ:INTC)’s fourth-quarter results were poor. There’s no sugarcoating the fact that earnings for the quarter dropped 27% year over year. Revenues fell 3% versus the prior year’s fourth quarter. For the full-year, revenues and earnings per share dropped 1.2% and 11%, respectively.

That being said, Intel Corporation (NASDAQ:INTC) has fought back lately. First, the company released a first-quarter earnings report that wasn’t as bad as the market had feared. Then, at a technology conference in Taiwan earlier this month, Samsung Electronics revealed that it will use Intel processors to power a new version of one of its main Android tablets.

This underscores the company’s desire to get its chips in mobile devices, which Intel has whiffed on to this point. At long last, Intel officers said they expect more than 30 tablets to use the company’s processors next year.

Microsoft Corporation (NASDAQ:MSFT) shares have followed suit recently, with the stock finally showing some signs of life after stagnating for quite some time. The market seems excited by the upcoming release of the software giant’s Xbox One console.

After failing to stay consistently above $30 per share for most of the last decade, Mr. Softy now trades north of $35 per share, and investors are hoping that finally, the stock may be on the verge of a breakout.

Not all old tech is worth buying

Another company tethered to the PC is Hewlett-Packard Company (NYSE:HPQ), which, like Intel and Microsoft, has had a resurgence lately. HP crashed hard in recent years as demand for its flagship printers and personal computers dried up.

The company’s fall from grace has been well-publicized. After trading north of $50 in early 2010, HP shares declined all the way down to the teens before recovering to its current level near $25 per share. The company reported a massive loss of $6.41 per share in 2012, due to higher operating expenses and a huge $18 billion impairment charge.

Their first-quarter 2013 results shouldn’t give investors much more of a reason to cheer. The company operates in six segments, and five of them saw revenue declines versus the first quarter last year. The only segment to see revenue growth was Financial Services. To be clear, many of Hewlett-Packard Company (NYSE:HPQ)’s core businesses—namely Printers and Personal Systems—are in decline.

On a positive note, HP continues to be a strong cash flow generator, producing more than $6.8 billion in free cash flow in fiscal 2012. HP uses part of that cash flow to pay a dividend to shareholders, which it raised 10% in 2012 and now yields 2.35% at recent prices.

On the subject of dividends, Intel and Microsoft also pay handsome yields to their shareholders. Microsoft yields 2.6%, and Intel leads the three with a 3.6% yield.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!