Finding a way to outperform the general market averages is never easy. Obviously, bonds, savings account, and/or certificates of deposits don’t look like a nice option when we see they give a negative real rate of return. Commodities continue to be excessively volatile as well. However, investing in these three technology-oriented companies below should provide returns that outperform the market in the long-run.
Is Intel Corporation (NASDAQ:INTC) a buy?
Semiconductor giant Intel Corporation (NASDAQ:INTC) has essentially a monopoly in the personal computing semiconductor market. The big problem, though, is that industry looks fully mature and is already showing signs of having little to even negative growth, as smartphones continue their impressive growth rates. Nonetheless, has the market pushed Intel’s price low enough for us to purchase?
I believe Intel Corporation (NASDAQ:INTC) is a buy for the following reasons. First and foremost, the company has exceeded consensus estimates in each of the past four quarters, which is no easy feat. Secondly, analysts are still calling for a very respectable 12.5% annual growth rate over the next five years. Thirdly, the company is trading at a relatively cheap 10 times trailing and forward P/E, and 4.5 times enterprise value to EBITDA. Lastly, and most importantly to me, the company yields a very nice and consistently growing 4.2% dividend. I think the stock will serve investors well.
Should we call on Cisco Systems, Inc. (NASDAQ:CSCO) to lead us to gains?
Networking and infrastructure giant Cisco Systems, Inc. (NASDAQ:CSCO) has its tentacles everywhere as a world-wide corporation. The company is a giant, with a market capitalization at approximately $115 billion, but is there still room for the stock to move higher?
I believe Cisco Systems, Inc. (NASDAQ:CSCO) should move higher due to a number of factors. Like Intel Corporation (NASDAQ:INTC), the company has exceeded consensus estimates in each of the past four quarters. Secondly, the company is trading at a relatively cheap 12 times trailing and 10 times forward P/E, and 6.5x enterprise value to EBITDA. Thirdly, the company has a very large $30 billion net cash position. Lastly, and most importantly to me, the company yields a very nice and consistently growing 2.6% dividend.
Is it finally time to take a bite of the Apple Inc. (NASDAQ:AAPL)?
As the one-time most valuable company in history, Apple Inc. (NASDAQ:AAPL) is surely a company you’ve heard of before. You, most likely, have also heard of its precipitous and massive 40% decline in just over five months, pushing it from its $705 all-time high to current $450 levels. However, has it become a great value stock at these levels?
I believe Apple Inc. (NASDAQ:AAPL) is, in fact, the best buy of the three stocks listed in this article. First and foremost, the company, according to its most recent earnings report, has an incredible net cash position at approximately $135 billion.
At its current valuation, that means the company is essentially one-third cash with no debt! Secondly, the company is trading at a relatively very cheap 10 times trailing and 8.5 times forward P/E, along with just a 0.5x price to expected growth rate. Thirdly, the company still has an amazing 25%+ profit margin, and returns on equity exceeding 38%. Lastly, the company has a consistently growing 2.5% dividend yield.
The Foolish conclusion:
As intelligent “Fools”, we are always on the hunt for companies that offer great value. I believe these three companies listed above do offer that while also paying us a nice dividend as the companies continue to thrive.
The article Will These 3 Technology Stocks Serve Our Portfolio Well? originally appeared on Fool.com. and is written by Brian Gorban.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
