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INTEL CORP (INTC).

Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to INTC. INTC was compared to 107 industry peers in the Semiconductors & Semiconductor Equipment industry. INTC has a medium profitability rating, but doesn't score so well on its financial health evaluation. INTC has a decent growth rate and is not valued too expensively.



4

1. Profitability

1.1 Basic Checks

In the past year INTC was profitable.
INTC had a positive operating cash flow in the past year.
In the past 5 years INTC has always been profitable.
Each year in the past 5 years INTC had a positive operating cash flow.

1.2 Ratios

With a Return On Assets value of 2.11%, INTC perfoms like the industry average, outperforming 52.83% of the companies in the same industry.
Looking at the Return On Equity, with a value of 3.84%, INTC is in line with its industry, outperforming 55.66% of the companies in the same industry.
The Return On Invested Capital of INTC (0.34%) is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for INTC is significantly below the industry average of 10.36%.
The 3 year average ROIC (4.70%) for INTC is well above the current ROIC(0.34%). The reason for the recent decline needs to be investigated.
Industry RankSector Rank
ROA 2.11%
ROE 3.84%
ROIC 0.34%
ROA(3y)5.69%
ROA(5y)9.23%
ROE(3y)10.11%
ROE(5y)16.64%
ROIC(3y)4.7%
ROIC(5y)8.86%

1.3 Margins

INTC's Profit Margin of 7.36% is in line compared to the rest of the industry. INTC outperforms 55.66% of its industry peers.
In the last couple of years the Profit Margin of INTC has declined.
With a Operating Margin value of 1.29%, INTC perfoms like the industry average, outperforming 43.40% of the companies in the same industry.
In the last couple of years the Operating Margin of INTC has declined.
Looking at the Gross Margin, with a value of 41.49%, INTC is in line with its industry, outperforming 40.57% of the companies in the same industry.
In the last couple of years the Gross Margin of INTC has declined.
Industry RankSector Rank
OM 1.29%
PM (TTM) 7.36%
GM 41.49%
OM growth 3Y-87.69%
OM growth 5Y-71.93%
PM growth 3Y-51.22%
PM growth 5Y-36.31%
GM growth 3Y-10.59%
GM growth 5Y-8.3%

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2

2. Health

2.1 Basic Checks

INTC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for INTC has been increased compared to 1 year ago.
The number of shares outstanding for INTC has been reduced compared to 5 years ago.
INTC has a worse debt/assets ratio than last year.

2.2 Solvency

INTC has an Altman-Z score of 1.77. This is a bad value and indicates that INTC is not financially healthy and even has some risk of bankruptcy.
INTC's Altman-Z score of 1.77 is on the low side compared to the rest of the industry. INTC is outperformed by 64.15% of its industry peers.
INTC has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.45, INTC is not doing good in the industry: 67.92% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 0.45
Debt/FCF N/A
Altman-Z 1.77
ROIC/WACC0.03
WACC11.22%

2.3 Liquidity

A Current Ratio of 1.57 indicates that INTC should not have too much problems paying its short term obligations.
With a Current ratio value of 1.57, INTC is not doing good in the industry: 80.19% of the companies in the same industry are doing better.
INTC has a Quick Ratio of 1.14. This is a normal value and indicates that INTC is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.14, INTC is not doing good in the industry: 78.30% of the companies in the same industry are doing better.
Industry RankSector Rank
Current Ratio 1.57
Quick Ratio 1.14

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5

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 34.04% over the past year.
Measured over the past years, INTC shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -25.69% on average per year.
INTC shows a decrease in Revenue. In the last year, the revenue decreased by -2.09%.
INTC shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -5.21% yearly.
EPS 1Y (TTM)34.04%
EPS 3Y-41.93%
EPS 5Y-25.69%
EPS growth Q2Q550%
Revenue 1Y (TTM)-2.09%
Revenue growth 3Y-11.36%
Revenue growth 5Y-5.21%
Revenue growth Q2Q8.61%

3.2 Future

The Earnings Per Share is expected to grow by 37.33% on average over the next years. This is a very strong growth
Based on estimates for the next years, INTC will show a quite strong growth in Revenue. The Revenue will grow by 11.14% on average per year.
EPS Next Y31.84%
EPS Next 2Y48.25%
EPS Next 3Y42.8%
EPS Next 5Y37.33%
Revenue Next Year6.37%
Revenue Next 2Y8.96%
Revenue Next 3Y9.3%
Revenue Next 5Y11.14%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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5

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 24.21 indicates a rather expensive valuation of INTC.
Based on the Price/Earnings ratio, INTC is valued a bit cheaper than 71.70% of the companies in the same industry.
INTC's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.32.
The Price/Forward Earnings ratio is 13.35, which indicates a correct valuation of INTC.
Based on the Price/Forward Earnings ratio, INTC is valued cheaply inside the industry as 89.62% of the companies are valued more expensively.
INTC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 20.24.
Industry RankSector Rank
PE 24.21
Fwd PE 13.35

4.2 Price Multiples

81.13% of the companies in the same industry are more expensive than INTC, based on the Enterprise Value to EBITDA ratio.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 13.7

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as INTC's earnings are expected to grow with 42.80% in the coming years.
PEG (NY)0.76
PEG (5Y)N/A
EPS Next 2Y48.25%
EPS Next 3Y42.8%

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4

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.66%, INTC has a reasonable but not impressive dividend return.
The stock price of INTC dropped by -29.88% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 1.97, INTC pays a better dividend. On top of this INTC pays more dividend than 87.74% of the companies listed in the same industry.
INTC's Dividend Yield is slightly below the S&P500 average, which is at 2.34.
Industry RankSector Rank
Dividend Yield 1.66%

5.2 History

The dividend of INTC decreases each year by -9.32%.
INTC has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-9.32%
Div Incr Years0
Div Non Decr Years0

5.3 Sustainability

INTC pays out 51.77% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP51.77%
EPS Next 2Y48.25%
EPS Next 3Y42.8%

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