The stock market collapse of 2022 has been harsh on Intel, with shares down 27% thus far in 2018.
Intel, on the other hand, has been a top investment over time, boosting investors’ wealth considerably due to a combination of stock price appreciation and a fat dividend. For example, $100,000 in Intel stock purchased at the start of 2007 was worth just shy of $390,000 as of 2021 if dividends were reinvested.
Now, can an identical investment in Intel stock help you retire a multimillionaire in 15 years? Let’s find out.
The solid dividend is here to stay
The company’s dividend has been a major factor in increasing investors’ wealth over time. The good news is that, despite facing headwinds, the firm appears poised to maintain its hefty dividend yield of around 4%. Intel’s revenue is anticipated to remain flat through 2022. Earnings are expected to drop to $3.49 per share from $5.47 per share in 2021.
Analysts anticipate that Intel’s financial performance will improve after the current downturn.
The higher earnings from Intel mean that there is potential for an increase in the dividend in the long run. As a result, investors seeking a steady stream of dividends can rely on Intel to grow their assets over time and help them approach their goal of becoming millionaires. However, because of the rise in Intel’s addressable market, it won’t be surprising if the stock speeds up as well.
Intel stock could deliver impressive upside
The stock of Intel might not have set the market on fire in recent years, but it may do so in the future owing to greater end-market possibilities.
So far, Intel’s main source of income has been supplying CPU chips to PCs, but that is changing. In the first quarter of 2022, the client computing division was its biggest revenue generator, with sales of $9.3 billion. It represented half of the company’s top line but fell 13% year over year in terms of revenue.
The data center and artificial intelligence department, on the other hand, hauled in $6 billion in sales last year, up 22 percent from the previous year. Sales of edge networking devices grew 23% year over year to $2.2 billion. Accelerated computing and graphics revenue increased by 21% annually to $219 million because of Intel’s entrance into the discrete graphics card market
As a result, there are a number of growth opportunities for Intel stock in the long run. In fact, according to Intel, the overall addressable market is worth $450 billion in 2026, with just $90 billion coming from traditional client computing. The remainder of the markets that Intel plans to enter will likely see double-digit growth in the future.
This suggests that Intel’s growth rate could rise and result in an improved value for the company. It won’t be surprising to see the stock outperform the broader market over the next decade or more. And, combined with its decent dividend yield, this might help investors get closer to their ultimate goal of retiring wealthy.
That is why long-term investors with a patience perspective can take notice of this chip stock, which is valued at just six times earnings now.
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