Well, I guess it was only a matter of time before I could no longer resist the temptation… I finally did it. I logged in this morning and found that the stock market was down again (it’s always negative on Monday’s, right?). Previously, I had targeted a 4.0% yield as a potential point of entry for Intel. As my luck turned out, INTC was sitting just around 4.0% when I decided to go ahead and pull the trigger.
I purchased 63 shares at $22.64/share. This is the second tech stock I’ve added to the portfolio, alongside Apple. In general, my preference is to shy away from technology stocks, as opposed to embracing them. Although I do work in high-tech, I have seen too many people burned by them (RIMM anyone?), so that my gut instinct is usually urging me to steer clear.
However, Intel is a slightly different story. This giant blue-chip has been around for decades, and has the technology, talent, r&d, and manufacturing to stay viable, and lead for years to come. Intel dominates the server, notebook, ultrabook, and PC businesses – their processors are ubiquitous in this application space. And although they have been late to the dance when it comes to winning sockets for mobile processors, it appears that management is making a strong commitment to tap into this lucrative market.
Here is a Forbes article from earlier this year, addressing Intel’s planned foray into mobile devices:
Long term, I think it is difficult to bet against Intel. So, when the share price is down on the short term, and the dividend yield is 4.0%, I think it makes a very solid play.
Here are the technicals, assuming an investment start date of January 1, 2005. You can see that the stock price has been mostly flat in the past few years (much like MSFT, CSCO). The growing dividend helps, and has returned 20% of the initial investment in 7 years.