Tech Giant Growth: Unless You’re a One-Stock (Apple) Investor, Intel Deserves a Look
Apple (AAPL) is unmatchable in growth, price relative to its growth, profitability and so much more these days. It is little wonder the chat boards treat the iPhone maker as if it’s the only publicly-traded stock. But it’s not. And owning just one stock would be nuts for any long-term investor.
But where to get growth? Among the five giant tech stocks charted here, Google (GOOG) comes in a distant second on revenue growth. But its concentration of revenue and earnings in its Internet search and advertising business – and a failure to hit a more recent home run – raise questions about its long-term growth outlook. Microsoft (MSFT), too, seems highly reliant on established businesses. It has a poor record in starting new ones, and it’s so big that even a decently-sized new business would be hard-pressed to move the revenue growth needle.
That leaves Cisco (CSCO) and Intel (INTC), which both make products less seen by consumers. Cisco is attempting a turnaround, having lost its mojo and let costs get a bit out of hand. Intel is trying to bring its chip dominance in PCs to the mobile world. Intel revenue growth looks the most up-and-down of the five, and of late it’s up.
Thankfully, Intel isn’t pricey, with a trailing PE of less than 12. Microsoft is down there with it. Intel makes Google seem expensive. (Apple makes everything seem expensive, but we’re looking for Apple alternatives here.)
Intel’s dividend yield is best in the group, followed closely by Microsoft’s dividend yield. Apple’s will show up on the chart soon. But don’t just chart it. Read up in he 10-K on Intel’s efforts to crack the mobile business, and on its surprisingly steady sales from those old items, PCs.
Intel isn’t likely to match Apple’s recent sales growth, or its stock movement. Don’t look for another Apple. Look for an established tech giant with potential to grow – again.
Filed under: Company Analysis