Intel Corporation (INTC): Three Reasons to Own This Tech Stock

Should the company make meaningful strides in finally penetrating the mobile device market, the stock could easily attain a valuation multiple closer to that of the broader market.

Reason #3: A nearly 4% yield and an imminent dividend increase

While a languishing stock price is hard to swallow for any investor, the burden is eased when an investor receives hefty dividend payments to wait for the turnaround. In fact, long-term investors understand the value of reinvesting dividends at low prices. That’s why Intel’s 3.75% dividend yield is so valuable when the stock is in a downtrend.

Moreover, that dividend is likely to get even bigger soon. Intel’s dividend has remained unchanged for four quarters in a row, meaning the company is due for an increase. Intel has aggressively raised its dividend in recent years and has the financial flexibility to do so again, so there’s no reason to think the company won’t give shareholders a pay bump in time for its next payout.

Since Intel Corporation (NASDAQ:INTC) generates so much free cash with almost no debt on the books, a 10% dividend increase (or more) isn’t out of the question.

The Foolish takeaway

Cisco, Microsoft Corporation (NASDAQ:MSFT), and Intel are each highly profitable businesses with billions in net cash on the books and competitive dividend yields. Moreover, each of these three stocks trades for a meaningful discount to the broader market.

Intel Corporation (NASDAQ:INTC) in particular has the highest dividend yield of the three and is more attractively valued than Cisco. At the same time, while Microsoft and Intel are both tied to the health of the personal computer, Intel Corporation (NASDAQ:INTC) is making more meaningful strides than Microsoft in expanding its business to carve out a piece of the mobile market pie. As a result, Intel is one of the best stocks to buy among large-cap technology and is a great value at current prices.

The article 3 Reasons to Own This Tech Stock originally appeared on Fool.com and is written by Robert Ciura.

Robert Ciura owns shares of Intel. The Motley Fool recommends Cisco and Intel. The Motley Fool owns shares of Intel Corporation (NASDAQ:INTC) and Microsoft. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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