It’s rare that I’m so enthusiastic about a single stock, but the value proposition investors can get with Intel (NASDAQ:INTC) right now is almost irresistible. To put it bluntly, if you’re not already holding INTC stock, you ought to seriously consider it.
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It’s not easy to convince people of this at the moment—because the Intel share price has basically gone nowhere since May.
But the game of investing is ultimately won by those who have the most patience. As long as you believe in the company, there’s no reason to give up on INTC stock.
Besides, as America and the world face a semiconductor shortage, Intel is making strides in solving the problem. As we’ll see, the company is doing its part to help bring the supply chain back into balance while rebuilding U.S. leadership in this crucial industry.
A Closer Look at INTC Stock
In reference to Intel, I recall a clever quote from InvestorPlace contributor Dana Blankenhorn: “The former chip industry leader is now cheap as chips.” That quip is still true today. From May through the end of September, INTC stock has stayed near $53, giving prospective investors many chances to get in while it’s still in the $50’s.
Don’t forget about the time in April when the buyers showed what they’re capable of. They ran the Intel share price all the way up to $68.49 before letting the sellers regain control.
Now that INTC stock has come back to earth, it’s a great time to remind everyone of what you’ll get with your investment. For one thing, you’ll get an extraordinary dividend yielder. In fact, Intel pays out a forward annual dividend yield of 2.57%—not too shabby for a tech company nowadays.
What you’ll also get is a terrific value. INTC’s trailing 12-month price-to-earnings ratio is 11.87, which is markedly low at a time when most technology stocks aren’t super cheap.
Intel Is Ramping Up with RAMP-C
To demonstrate Intel’s commitment to making America the world’s top microprocessor manufacturer, the company recently announced a crucial agreement with the U.S. Department of Defense. Reportedly, Intel will provide commercial semiconductor foundry services in the first phase of the Rapid Assured Microelectronics Prototypes – Commercial (RAMP-C) program. RAMP-C’s purpose is to facilitate the use of a U.S.-based commercial semiconductor foundry ecosystem in order to build tech parts and products for the DoD.
Intel notes that more than 80% of leading-edge manufacturing capacity is concentrated in Asia today—thus leaving the DoD with limited onshore access to essential semiconductor foundry technology. In other words, the importance of RAMP-C goes far beyond the impact on Intel’s bottom line. There’s a national security angle at work here.
Breaking Ground on Two New Factories
Along with the news concerning the RAMP-C program, Intel’s stakeholders should cheer the news of a groundbreaking ceremony in the western U.S. Specifically, Intel just established two new microchip factories in the state of Arizona. This $20-billion project is intended to bolster U.S. semiconductor leadership. Hopefully, it will also help to restore geographic balance to the global microchip supply chain.
These two new factories will be named Fab 52 and Fab 62. With these additions, Intel’s Ocotillo campus will house a total of six “fabs” (fabrication plants). The payoff might not be immediate since the two new fabs aren’t expected to be fully operational until 2024.
However, prospective stakeholders should know that the new fabs will manufacture Intel’s most advanced process technologies. These will include the Intel 20A chip node, which features the company’s RibbonFET and PowerVia innovations.
The Bottom Line for INTC Stock
INTC stock offers investors a solid dividend yield and excellent value for a tech stock in 2021. That should be enough to convince you to invest, but there’s another benefit to consider: Owning shares of Intel is, in effect, investing in America’s comeback as a semiconductor manufacturer.
And so, in a time when microchips are in short supply, Intel is stepping up and delivering solutions.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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