Intel: A Value Stock To Buy For Dividends, Earnings Growth

We recommend Intel Corporation (INTC) as a buy, based on its low valuations and high future growth prospects. The stock is relatively undervalued, and is trading at P/E and P/S of 11x and 2.4x, and it has a significant upside potential. Our 12-month price target is $40, with an upside of 50%. INTC is only up 3% YTD. We are bullish on Intel's tablet and smartphone prospects, especially given that consumer preferences have changed manifold, and the consumption of smartphones and tablets has reached new highs. In 2Q2012, the company paid $1.1 billion in dividends and bought back shares worth $1.1 billion to increase its shareholder value. The company's synergies with ASML Holding NV (ASML) will help it sustain growth by introducing next-generation technology. In order to revamp its position, Intel is injecting $3 billion in ASML, manufacturers of semiconductors and microchips. Intel's 15% stake in the company will help... Read more