Blue-Chip Stock Announces New 5G Agreement, Acquisition

Intel will acquire software developer Granulate Cloud Solutions

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Intel Corporation (NASDAQ:INTC) is up 1.7% at $48.95 at last check, after the chip name signed an agreement with Lockheed Martin (LMT) to advance 5G communication for the U.S. and allied defense systems. Plus, the blue chip announced plans last week to acquire software developer Granulate Cloud Solutions, which will enable data center customers to maximize computer workload performance, and reduce infrastructure and cloud costs.

The shares bounced off their March low near the $44 area, though the $53 level last week rejected this rally. The security is today testing the 40-day moving average once again, after surging above this trendline two weeks ago. Year-over-year, INTC remains down 24%.

INTC 40 Day

The options pits lean bullish towards INTC. This is per the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.74, which stands higher than just 13% of readings in its 12-month range.

These options traders are in luck, as Intel stock sports affordable premiums right now. The security's Schaeffer's Volatility Index (SVI) of 26% sits higher than 21% of readings from the past year, indicating these options traders are pricing in relatively low volatility expectations for INTC at the moment.

Moreover, Intel stock offers an attractive dividend yield of 3.03%, with forward dividend of $1.46, a decent valuation at a forward price-earnings ratio of 15.24, and a price-sales ratio of 2.70. Plus, INTC has also seen consistent, albeit slow, revenue growth. Digging deeper, the blue chip's revenues grew 1.5% since 2020, and 11.5% over the last three years. This growth is expected to continue, with 1.7% estimated revenue growth for 2022, and 2.3% estimated revenue growth for 2023.

However, Intel has struggled on the bottom-line, experiencing a consistent decline in annual net income since 2018, totaling a 6% drop. In addition, analysts still see a 35.3% drop in earnings for 2022. Nonetheless, INTC is expected to end the trend in 2023, with 4.5% projected earnings growth. This should be very positive for Intel stock and its long-term investors, as they look to profit through dividends and price appreciation.

 




 
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