There are no safe havens in the stock market. Every stock carries risk. But some less than others. This column features stocks that have shown one or more of the following characteristics: less volatility, better earnings, larger market caps, safe and increasing dividends. In these times of turmoil, our goal is to show readers better opportunities for investing with fewer risks.

November 18, 2011 - Intel Corporation (INTC-NASDAQ) engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. It offers microprocessor products used in notebooks, netbooks, desktops, servers, workstations, storage products, embedded applications, communications products, consumer electronics devices, and handhelds.

Further, the company makes NAND (a special form of flash memory) products primarily used in portable memory storage devices, digital camera memory cards, and solid-state drives; software products comprising operating systems, middleware, and tools used to develop, run, and manage various enterprise, consumer, embedded, and handheld devices; and software development tools that enable the creation of applications.

Additionally, it develops computing platforms, which are integrated hardware and software computing technologies designed to offer an optimized solution.

The company sells principally to original equipment manufacturers, original design manufacturers, PC components and other products users, and other manufacturers of industrial and communications equipment. It has a strategic alliance with Scientific Conservation Inc. Intel Corporation was founded in 1968 and is based in Santa Clara, California.

Latest News:
Goldman Sachs analyst James Covello trimmed his EPS estimates for Intel to reflect the expected impact on the company from the restricted supply of hard disk-drives as a result of the severe flooding in Thailand. The basic logic: tight supplies of drives means reduced production of PCs, and lower sales of microprocessors.

For the fourth quarter, he now sees sales of $14.3 billion and profits of 70 cents a share, down from $14.7 billion and 74 cents; for Q1, he now expects revenue of $12.7 billion and profits of 48 cents a share, down from $13.5 billion and 56 cents.

On the other hand, he also now thinks Intel will reduce capital spending more than previously expected: his forecast for 2012 cap ex is now $7 billion, down from a previous estimate of $8 billion, and below the estimated $10.5 billion for 2011.

Covello contends that the Street is "complacent about short-term risks" in the stock, which is up 14% quarter-to-date; he notes that his EPS estimates are 5% below the Street for Q4 and 25% below for Q1.

"However, if the stock declines and estimates are lowered in the next few months as we expect, then we could be more neutral on Intel's shares now that there are signs capex is being reduced," he writes. "While the likely reduction in capex is a positive for Intel's gross margin, it is a negative for the [semiconductor equipment] sector." He thinks equipment sector orders will "reach a new low in mid-2012 as Intel reduces and foundries revert from robust levels given low utilization."

Expectations:

Consensus estimate for fourth quarter: 70 cents vs 59 cents (45 analysts)
Consensus estimate for 2011 EPS: $2.45 (47 analysts)
Consensus estimate for 2012 EPS: $2.56 (52 analysts)

Important Numbers:
- Trailing P/E: 10.54
- Forward P/E: 9.51
- Price to sales rato: 2.4
- Price to book: 2.7
- Operating margin: 32.77%
- Profit margin: 24.75%
- Return on equity: 27.21%
- Return on assets: 16.11%
- Revenues for the last 12 months: $51.57 billion
- Total cash: $15.20 billion
- Total cash per share: $2.99
- Total debt: $7.27 billion
- Total debt to equity: 15.75%
- Current ratio: 2.24
- Book value per share: $9.01
- Beta: 1.01
- 52 week change: 15.14%
- Shares Outstanding: 5.09 billion
- Float: 5.09 billion
- Held by institutions: 62.8%
- Annual dividend: 84 cents
- Yield: 3.3%

- Company Web site: www.intel.com

Ted Allrich