A good dividend stock to own: Intel

 






Hello folks!

Hope everyone doing well! Even most people are not familiar with Intel, however this is part of our life for last few decades. Let me tell my side of the story: I bought my first computer in 1997. Back then laptops were almost nonexistent. I had back bending hard time moving that heavy monitor and CPU to my upstairs room. The first thing I remember seeing that shiny blue sticker on CPU “Intel inside”. Till these days most CPU and laptops come with same blue sticker. Isn’t amazing so many years later same company running the brains of computer across the world. Intel is known for manufacturing processors for computers, data server. If you are not familiar with processor, it’s simply what brain does for a human body, that’s what processor does for computers. 

Intel enjoys dominating the processor market for many years. Although in recent years AMD, NVIDIA are biting some of its market share. However, Intel is like that 1000-pound gorilla that is hard to push around. I have started buying intel stock from very beginning on my Roth’s Ira and taxable brokerage account. Before that I had intel in my 401k account index funds. Intel is part of S&P 500 and a consistent dividend payer for last 20 years. 



Here is some strength of this stock:

P/E: Currently it is running on a very attractive P.E. of 9. Intel stock lost about 20 percent value due to their failure to launch 7 nanometer chip this year. This caused P.E. to drop significantly which I believe opened great bargain for long term investors. With strong R&D boosting and overhauling manufacturing, I’m sure intel will overcome this hiccup in coming years.

Dividend: Intel currently pays 2.7 percent dividend which is great. Usually any companies in this sector hardly pays any dividend. It has history of increasing dividend for last 20 years. So, for dividend focused investors this is a source of constant cash flow.

Future and profitability: Intel stock price did not see same skyrocket stock price overshoot like AMD and NVIDIA. However, to me those stock price looks bit speculative and not sure in future they will remain that high. If those companies cannot take big chunk of market share from intel, there is no way to justify P.E. ratio over 100. Another strong side of intel business is its high gross margins of profit. Intel’s profit margins is about 26 percent. This is more than three times of its rivals. So overall Intel is running a market leading position for long time with high profit margin.

So far, I am pleased with Intel stock’s contribution to my portfolio growth. I am going to buy it on regular basis in coming months. I am sure that shiny blue “Intel Inside” sticker is going to be on the laptops and PCs for many years.

 

 

 

Disclaimer: This article shows my personal opinion and it’s for entertainment purpose only. This is no way professional financial advice. You may seek professional advice or conduct own research before investing. This site uses affiliated links and cookies. Please read the disclaimer & Privacy section for details.


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