Intel Corporation (NASDAQ:INTC) stock may not be the top stock on investors’ lists anymore, but the computing giant is still a quality tech company. The recent volatility in the market has taken INTC stock down with it, falling about 15% since the start of the year.
If you believe in a quality business, with shares on sale, then Intel might be a company worth taking a look at. Here’s why.
1. 5G Is About to Take Over
Intel announced last Monday at the Mobile World Congress that it’s getting ready for the next generation in wireless technology—5G—which has the potential to be 10 to 100 times faster than today’s LTE networks. (Source: “Intel bets big on 5G to avoid missing out on mobile (again),” Engadget, February 22, 2016.)
Intel is partnering with AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ), Ericsson (STO:ERIC-B), Huawei Technology Co Ltd (SHE:002502), and ZTE to collaborate and help test 5G technologies. All of these companies are major players in the telecom industry, which will limit Intel’s risk from venturing into new technology territory. The partnerships take Intel from having almost nothing to do with 3G technology, to being at the forefront of 5G. As such, INTC will play a big part in next-generation 5G technology.
2. Intel Stock Is Bracing for the Internet of Things
Intel is also making sure it’s going to be a major player in the “Internet of Things” (IoT) industry. Intel recently started the Open Connectivity Foundation, which is bringing together a number of industry leaders to strategize how to create value and demand for new IoT products. So far, its members include Cisco Systems, Inc. (NASDAQ:CSCO), Microsoft Corporation (NASDAQ:MSFT), Samsung Electronics Co Ltd (KRX:005930), and QUALCOMM, Inc. (NASDAQ:QCOM).
Cisco predicts that 50 billion devices and objects will be connected to the Internet by 2020. (Source: “The Internet of Things,” Cisco.com, accessed March 1, 2016.) Intel is looking to jump into this market by selling the chips for IoT devices and objects. The potential market here is huge and INTC stands to benefit.
3. INTC Is Cheap
INTC stock is a bargain at its current price, trading at about 11 times next year’s earnings. Intel may seem like a stodgy old company, but it’s very reliable, especially when it comes to dividends. INTC stock has been paying out dividends since 1992. At the current stock price, INTC stock is yielding a nice 3.5% dividend. Also, Intel’s payout ratio is about 41%, which is very sustainable.
The Bottom Line on INTC Stock
With INTC selling on the cheap and with its potential for growth in future technologies, Intel stock is worth considering holding. Now might be a better time than ever to take a look at Intel.