The Intel Corporation (INTC)-Apple Inc. (AAPL) Connection

The relationship between Intel and Apple could ease the troubled relationship between Samsung and Apple, and also avoid conflicts in the future. Apple could use Intel’s large production capacity and top technologies for its benefits. For Apple shareholders, this is a particularly good scenario.

Essentially, these companies are both producing large cash flow, and they both have very good balance sheets. Some of the most important favorable factors for Intel are:

The operating and net margin of 27.4% and 20.6%, respectively, are higher than the industry average of 22% and 17.1%.

Based on a three-year average, Intel Corporation (NASDAQ:INTC) has a revenue growth of 14.9%, versus the average industry growth of 11.9%.

The return on equity of 22.7% is stronger than the industry average of 20.2%.

A few essential positive factors for Apple Inc. (NASDAQ:AAPL) are:

It has an operating margin of 33.5% and a net margin of 25.4%. The industry averages are 11.5% and 13.6%, respectively.

It has a three-year average revenue growth rate of 53.9%, versus the 8.0% average industry growth.

P/B and P/E are 3.2 and 10.6, respectively. The industry averages are 3.9 and 15.0.

The bottom line

Both companies are able to operate efficiently, with or without any partnership and on their own. They are both able to generate large quantities of cash. Intel has P/E of 12.1 and Apple has P/E of 10.6. This makes it difficult for different investors to find better bargains from other companies. Apple Inc. (NASDAQ:AAPL) and Intel Corporation (NASDAQ:INTC) could work together and create a win-win situation. This could significantly increase the price of the shares for both companies. The partnership between Intel and Apple would be a logical decision, and there would be limited risks for both companies right now.

The article Is Intel Moving Closer To Producing Chips For Apple? originally appeared on Fool.com and is written by Marcus Vilkas.

Marcus Vilkas has no position in any stocks mentioned. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple, Intel, and Qualcomm. Marcus 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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