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Intel: An Owners Manual for Investors

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A broad but brief look at the chipmaker.

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Intel: An Owners Manual for Investors

  1. 1. Intel An Owner's Manual for Investors
  2. 2. you're entitled to a share of its earnings. As an owner of Intel's stock
  3. 3. NOT TO SCALE obviously $11.5 Billion Intel's 12-Month Earnings Intel's Earnings per share $2.34
  4. 4. If you divide Intel's share price by its earnings per share (EPS), you get its price-to-earnings ratio.
  5. 5. P/E Ratio = Share Price EPS 14.80= $34.63 $2.34 = This is how much it costs to buy $1 of Intel's annual earnings.
  6. 6. A higher P/E ratio implies a lower potential return.
  7. 7. 1 10 100 1,000 100 Biggest S&P Companies P/ERatio Most companies have P/E ratios between 12 and 30. What Is a Typical Stock's P/E Ratio?
  8. 8. You can also use Intel's P/E ratio to derive its earnings yield.
  9. 9. 1 14.80 6.8% Intel's Earnings Yield 1 P/E Ratio = ==
  10. 10. This helps you compare a stock to other types of investments, such as bonds and real estate.
  11. 11. 6.76%6.63% 4.33% 2.90% 2.45%2.21% Intel's Earnings Yield Class A Office Building Cap Rate S&P 500 Earnings Yield 10-Year AAA Corp. Bonds 5-Year CDs 10-Year Treasuries Average Rates of Return
  12. 12. Of course, if you own one share of Intel stock, you don't get a check each year for its EPS.
  13. 13. You receive quarterly dividends instead, which typically account for only a portion of total earnings.
  14. 14. 39% Intel's Payout Ratio The payout ratio is the percentage of earnings paid as dividends. Anywhere from 30% to 70% is normal.
  15. 15. 2.77%Intel's Dividend Yield
  16. 16. Intel's Dividend Yield = Dividend per Share Share Price = $0.96 $34.63 = 2.77%
  17. 17. You can then use this to compare stocks based on their income- generating potential.
  18. 18. 2.77% 3.71% 3.31% 2.74% 1.67% 0.71% Intel Exxon Wal-Mart Wells Fargo Comcast Visa Representative Dividend Yields
  19. 19. Intel also buys back its own stock.
  20. 20. This reduces its share count, which increases the ownership interest of each remaining share.
  21. 21. $6.2 Billion -2.7% Intel's Buybacks (TTM) Change in Intel's Share Count (TTM)
  22. 22. Intel's stock? So, what does the future hold for
  23. 23. Intel 104% S&P 500 119% -40% -20% 0% 20% 40% 60% 80% 100% 120% 140% Today20132011200920072005 If the Past Is Prologue... Total return since Jan. 1, 2005
  24. 24. Intel's earnings to grow. While it's impossible to predict the future with precision, analysts expect
  25. 25. $2.22 $2.37 Current Fiscal Year Next Fiscal Year Average Earnings per Share Estimate Among Wall Street Analysts Divining Intel's Future
  26. 26. Looking for more information like this? The Motley Fool’s mission is to help the world invest better. We’ve done this over the past 20 years by thinking long term and outside the box – even if that means turning Wall Street on its head. To receive a special free report about what The Motley Fool thinks might be the next big industry to come out of Silicon Valley, click here now.

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