Saturday, March 11, 2017

Analysis of Intel 2017



Company: Intel 

ISIN US4581401001 | WKN 855681 

Business: An American hardware producer (mainly processor). They have now increased their segments from five up to seven with an additional six sub-segments that I am sure all are of importance until the next report.

Active: Products are sold world wide. 

P/E: 17.0

To find out more concerning Intel then please go to analysis of Intel 2016.
Contrarian analysis of Intel 2017

The P/E of Intel is a bit of on the high side with 17.0 and also the P/b is a bit high with 2.7 which gives according to Graham a clear no go. The earnings to sales looks ok with 17% and the ROE also ok with 15.6%. The book to debt ratio is excellent with 1.4.
In the last five years they have had a disappointing yearly growth rate of only 2.2% which is... well... like inflation and this then gives us a motivated P/E of 9 to 13 which means that Intel is today a bit overvalued by the market.
They spend far too much money on R&D since it is up at over 120% of their earnings.
They pay an acceptable dividend in the size of 2.9% which represents 50% of their earnings so they should for many reasons start to improve those earnings!

Conclusion: Graham says no to Intel and so do I. The P/E, P/B are currently too high and the small dividend does not justify an investment. Since I am already a shareholder in Intel I see no reason to leave and will simply remain as a shareholder for now.

No comments: