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Intel

Nasdaq:INTC
Snowflake Description

Established dividend payer and fair value.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
INTC
Nasdaq
$210B
Market Cap
  1. Semiconductors and Semiconductor Equipment
Company description

Intel Corporation designs, manufactures, and sells computer, networking, and communications platforms worldwide. More info.


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3 Month History
INTC
Industry
5yr Volatility vs Market

Value

 Is Intel undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Intel to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

How is this discounted cash flow calculated?

  • The current share price of Intel is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Intel's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Intel's earnings available for a low price, and how does this compare to other companies in the same industry?
  • Intel is good value based on earnings compared to the US Semiconductors and Semiconductor Equipment industry average.
  • Intel is good value based on earnings compared to the US market.
Price based on expected Growth
Does Intel's expected growth come at a high price?
  • Intel is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Intel's assets?
  • Intel is good value based on assets compared to the US Semiconductors and Semiconductor Equipment industry average.
X
Value checks
We assess Intel's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Semiconductors and Semiconductor Equipment industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Semiconductors and Semiconductor Equipment industry average (and greater than 0)? (1 check)
  5. Intel has a total score of 3/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.
    Note 2: PEG ratio is based on analysts EPS growth expectations in 1 year (3.06%).

    Full details on the Value part of the Simply Wall St company analysis model.
X
Discounted cash flow (2 Stage Free Cash Flow to Equity)

The calculations below outline how an intrinsic value for Intel is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.

See our documentation to learn about this calculation.

5 year cash flow forecast

Present value of next 5 years cash flows:
$47,237

Terminal Value

Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)

Terminal Value = $14,779 × (1 + 2.47%) ÷ (10.88% – 2.47%)

Terminal value based on the Perpetuity Method where growth (g) = 2.47%:
$180,167

Present value of terminal value:
$107,521

Equity Value

Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
$154,758 = $47,237 + $107,521

Value = Total value / Shares Outstanding ($154,758 / 4,680)

Discount to Share Price

Value per share:
$33.07

Current discount (share price of $44.65): -35.03%



Estimate of Discount Rate

The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.

Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)

Discount rate = 10.88% = 2.47% + (1.116 * 7.53%)



Estimate of Bottom Up Beta

The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($210,319,200,000).

Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))

1.116 = 1.01 (1 + (1- 30%) (15.04%))

Levered Beta used in calculation = 1.116



Assumptions
  1. The risk free rate of 2.47% is from the 10 year government bond rate in USD.
  2. The bottom-up beta is estimated by analysing other companies in the same industry.
  3. The Equity Risk Premium is calculated by subtracting the risk free rate from the market return premium (7.53%) (source: Buffet).
  4. The dividend discount model is automatically used for companies in the following industries: Banks, Insurance, Real Estate Investment Trusts (REITs), Diversified Financial Services and Capital Markets.

Future Performance

 How is Intel expected to perform in the next 1 to 3 years based on estimates from 38 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
4.5%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Intel expected to grow at an attractive rate?
  • Intel's earnings growth is expected to exceed the low risk savings rate of 3.6%.
Growth vs Market Checks
  • Intel's earnings growth is positive but not above the US market average.
  • Intel's revenue growth is positive but not above the US market average.
Annual Growth Rates Comparison
Analysts growth expectations
Super high growth metrics
High Growth Checks
  • Intel's earnings are expected to grow by 4.5% yearly, however this is not considered high growth (20% yearly).
  • Intel's revenue is expected to grow by 3.3% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Intel is not expected to perform strongly, Return on Equity (ROE) in 3 years is estimated to be below 20%.

Improvement & Relative to industry
  • Performance (ROE) is expected to be above the current US Semiconductors and Semiconductor Equipment industry average.
  • A decline in Intel's performance (ROE) is expected over the next 3 years.
X
Future performance checks
We assess Intel's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the US market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the US market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Intel has a total score of 1/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Intel performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Intel's growth in the last year to its industry (Semiconductors and Semiconductor Equipment).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Intel's year on year growth rate is negative over the past 5 years, however the most recent earnings are above average.
  • Intel's 1 year earnings growth exceeds its 5 year annual average (33.6% vs -0.6%)
  • Intel's earnings growth has not matched the US Semiconductors and Semiconductor Equipment industry average in the past year (33.6% vs 35.1%).
Earnings and Revenue History
Intel's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Strong return on shareholders funds (ROE > 20%) last year.
  • Intel performed above the US Semiconductors and Semiconductor Equipment industry average based on Return on Assets (ROA) last year.
  • Performance based on Return on Capital Employed (ROCE) has been diminishing over 3 years.
X
Past performance checks
We assess Intel's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Semiconductors and Semiconductor Equipment industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Intel has a total score of 3/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Intel's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Intel's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Intel is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Intel's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of Intel's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of stock/ inventory/ unsold assets.
  • Total debt is covered by total short term assets, assets are 1x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
  • Intel's level of debt (44.6% of total debt) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (15% vs 44.6% today).
  • Total debt is well covered by annual operating cash flow (72.8%, greater than 20% of total debt).
  • Interest on debt is well covered by earnings (EBIT is 72.1x coverage).
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Financial health checks
We assess Intel's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by short term assets? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Intel has a total score of 3/6, see the detailed checks below.


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Intel's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
2.39%
Current annual income from Intel dividends. Estimated to be 2.6% next year.
If you bought $2,000 of Intel shares you are expected to receive $0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Paying above low risk savings rate (2.25%).
  • Paying below markets top dividend payers (3.18%).
Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
  • Dividends per share have been stable in the past 10 years.
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of Intel's earnings are paid to the shareholders as a dividend.
  • Dividends paid are well covered by net profit (2.8x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by net profit (3x coverage).
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Income/ dividend checks
We assess Intel's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.5%) - if not then the rest of the checks are ignored.
  2. Current dividend yield, is there one at all, is it higher than the low risk savings rate, and is it above the top 25% of dividend payers? (2 checks)
  3. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  4. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  5. How sustainable is the dividend, can Intel afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  6. Intel has a total score of 5/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Intel's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Brian Krzanich, image provided by Google.
Brian Krzanich
COMPENSATION $19,079,000
AGE 57
TENURE AS CEO 4.5 years
CEO Bio

Mr. Brian M. Krzanich has been the Chief Executive Officer of Intel Corporation since May 16, 2013. Mr. Krzanich served as the Chief Operating Officer of Intel Corporation from January 20, 2012 to May 16, 2013 and its Executive Vice President from November 2012 to May 16, 2013. He served as Senior Vice President of Intel Corporation from January 2010 to November 2012 and its General Manager of Manufacturing & Supply Chain until January 20, 2012 and also served as its Head of Worldwide Manufacturing. He was responsible for all aspects of Intel's factories and operations worldwide. He served as Vice President of Intel Corporation from December 2005 to January 2010. Mr. Krzanich served as General Manager of Manufacturing and Supply Chain of Intel Corporation. Mr. Krzanich was responsible for all aspects of Intel's assembly and test operations worldwide. Mr. Krzanich served as General Manager of Assembly/Test of Intel Corporation until 2010. He joined Intel in 1982. Since 2001, Mr. Krzanich has been responsible for the implementation of the 0.13-micron logic process technology across Intel's global factory network. From 1997 to 2001, Mr. Krzanich served as the Fab 17 plant manager, where he oversaw integrating Digital Equipment Corporation's semiconductor manufacturing operations into Intel's manufacturing network. The assignment included building updated facilities as well as initiating and ramping 0.18-micron and 0.13-micron process technologies. From 1996 to 1997, Mr. Krzanich was the Fab 6 plant manager in Arizona. From 1994 to 1996, he served as a Manufacturing Manager of Fab 12 in Arizona. He was a Process Engineer at various Intel locations. He has been a Director of Intel Corporation since May 16, 2013. He serves as a Director of MiaSole, Inc. Mr. Krzanich has been a Director of Deere & Company since January 6, 2016. Mr. Krzanich was presented an Intel Achievement Award in 1999. He holds one patent for semiconductor processing. Mr. Krzanich studied bachelor's degree in Chemistry from San Jose State University in 1982.

CEO Compensation
  • Brian's compensation has increased by more than 20% in the past year.
  • Brian's compensation appears reasonable.
Management Team Tenure

Average tenure and age of the Intel management team in years:

2.3
Average Tenure
55.1
Average Age
  • The tenure for the Intel management team is about average.
Management Team

Andy Bryant

TITLE
Executive Chairman
COMPENSATION
$4M
AGE
67

Brian Krzanich

TITLE
CEO & Director
COMPENSATION
$19M
AGE
57
TENURE
4.5 yrs

Bob Swan

TITLE
Executive VP & CFO
COMPENSATION
$12M
AGE
57
TENURE
1.1 yrs

Stacy Smith

TITLE
Group President of Manufacturing
COMPENSATION
$8M
AGE
54

Greg Pearson

TITLE
Senior Vice President
COMPENSATION
$5M
AGE
56
TENURE
3.8 yrs

Murthy Renduchintala

TITLE
Chief Engg. Officer and President of Client & Internet of Things Businesses & Systems Architecture
COMPENSATION
$20M
AGE
52

Diane Bryant

TITLE
Group President of the Data Center Group (Leave of Absence)
COMPENSATION
$6M
AGE
55
TENURE
0.6 yrs

Kevin McBride

TITLE
Principal Accounting Officer
AGE
47

Paula Tolliver

TITLE
Chief Information Officer and Corporate Vice President
TENURE
1.3 yrs

Steve Rodgers

TITLE
Executive Vice President and General Counsel
AGE
51
Board of Directors Tenure

Average tenure and age of the Intel board of directors in years:

10.1
Average Tenure
60.9
Average Age
  • The average tenure for the Intel board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Board of Directors

Brian Krzanich

TITLE
CEO & Director
COMPENSATION
$19M
AGE
57
TENURE
4.5 yrs

Dave Pottruck

TITLE
Independent Director
COMPENSATION
$335K
AGE
69
TENURE
19.8 yrs

Andy Bryant

TITLE
Executive Chairman
COMPENSATION
$4M
AGE
67
TENURE
5.5 yrs

Charlene Barshefsky

TITLE
Independent Director
COMPENSATION
$317K
AGE
66
TENURE
13.8 yrs

Frank Yeary

TITLE
Independent Director
COMPENSATION
$342K
AGE
53
TENURE
8.7 yrs

Aneel Bhusri

TITLE
Independent Lead Director
COMPENSATION
$296K
AGE
51
TENURE
0.5 yrs

David Yoffie

TITLE
Independent Director
COMPENSATION
$343K
AGE
62
TENURE
28.8 yrs

Reed Hundt

TITLE
Independent Director
COMPENSATION
$323K
AGE
69
TENURE
16.8 yrs

King Liu

TITLE
Independent Director
COMPENSATION
$156K
AGE
54
TENURE
1.3 yrs

Omar Ishrak

TITLE
Independent Director
AGE
61
TENURE
0.7 yrs
Recent Insider Trading
  • Intel insiders have only sold shares in the past 3 months.
Who owns this company?
X
Management checks
We assess Intel's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Intel has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

Company News

Company Info

Map
Description

Intel Corporation designs, manufactures, and sells computer, networking, and communications platforms worldwide. The company operates through Client Computing Group, Data Center Group, Internet of Things Group, Non-Volatile Memory Solutions Group, Intel Security Group, Programmable Solutions Group, and All Other segments. Its platforms are used in notebooks, 2 in 1 systems, desktops, servers, tablets, smartphones, wireless and wired connectivity products, and mobile communication components; enterprise, cloud, and communication infrastructure; and retail, transportation, industrial, video, buildings, and other market segments. The company offers microprocessors that processes system data and controls other devices in the system; chipsets, which send data between the microprocessor and input, display, and storage devices, such as keyboard, mouse, monitor, hard drive or solid-state drive, and optical disc drives; and system-on-chip and multichip packaging products that integrate its central processing units with other system components onto a single chip. It also offers NAND flash memory products primarily used in solid-state drives; security software products that secure computers, mobile devices, and networks; programmable semiconductors and related products for communications, data center, industrial, military, and automotive market segments. In addition, the company develops computer vision and machine learning-based sensing products, mapping and driving policy technology solutions for advanced driver assistance systems, and autonomous driving technologies. It serves original equipment manufacturers, original design manufacturers, cloud and communications service providers, and industrial, communications, and automotive equipment manufacturers. The company was founded in 1968 and is based in Santa Clara, California.

Details
Name: Intel Corporation
Ticker: INTC
Exchange: NasdaqGS
Founded: 1968
Market Cap: $210,319,200,000
Shares outstanding: 4,680,000,000
Website: http://www.intel.com
Address: Intel Corporation
2200 Mission College Boulevard,
Santa Clara,
California, 95054,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS INTC Common Stock Nasdaq Global Select US USD 20. Nov 1972
DB INL Common Stock Deutsche Boerse AG DE EUR 20. Nov 1972
XTRA INL Common Stock XETRA Trading Platform DE EUR 20. Nov 1972
SWX INTC Common Stock SIX Swiss Exchange CH CHF 20. Nov 1972
SEHK 4335 Common Stock The Stock Exchange of Hong Kong Ltd. HK HKD 20. Nov 1972
ENXTAM INCO Common Stock Euronext Amsterdam NL USD 20. Nov 1972
WBAG INTC Common Stock Wiener Boerse AG AT EUR 20. Nov 1972
SNSE INTC Common Stock Santiago Stock Exchange CL USD 20. Nov 1972
BVC INTC Common Stock Bolsa de Valores de Colombia CO COP 20. Nov 1972
BMV INTC * Common Stock Bolsa Mexicana de Valores MX MXN 20. Nov 1972
BOVESPA ITLC34 BDR EACH REPR 1 COM SH Bolsa de Valores de Sao Paulo BR BRL 23. Aug 2012
BASE INTC CEDEARS (EACH 5 REP 1 COM USD0.001) Buenos Aires Stock Exchange AR ARS 14. Apr 1999
Number of employees
Current staff
Staff numbers
106,000
Intel employees.
Industry
Industry: Semiconductors
Sector: Semiconductors and Semiconductor Equipment