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Hurray! Stocks Are on Sale!

By Katie Spence – Updated Apr 6, 2017 at 7:27PM

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With the wild ride stocks have taken recently, investors may be looking for a safe haven.

Let's face it, stocks have been on a wild ride recently, causing many to question whether investing is a good idea. For some, the allure of gold investing has become that much shinier, and for others, their mattress is singing a soothing song of safety. However, for the bold, now is the time to buy, and there is one company out there just begging to be noticed.

Intel does it better
When you think of computers, what comes to mind? Macs? PCs? Perhaps what should come to mind is the kind of processor the computer runs on. Whether your favorite computer is a Dell, Sony, Gateway, Mac, or any other popular brand, the processing system behind each of these is likely an Intel (Nasdaq: INTC) Core processor. And with each of these brands relying on Intel to supply them with processors, Intel has become a behemoth in the technology world.

For example, over the past few years, Intel's net income grew from $5 billion in 2008 to over $11 billion in 2010. Additionally, free cash flow grew from $5.3 billion in 2008 to $11.5 billion in 2010, and operating margin grew from 24% in 2008 to 36% in 2010. That's great news for investors who are greeted day in and day out with stories about the declining relevance of the PC. In the face of all this, Intel has been able to maintain its pricing power.

Intel on sale
Although Intel took a slight tumble with the rest of the stock world, it is by no means a sign that Intel is headed for disaster. If anything, Intel's recent tumble is signaling that Intel is currently on sale, and now is the time to get in.

Currently, Intel is trading right around $20 per share, or a little more than 9 times earnings. That is a great price for the technology giant, and well below its historical earnings multiple. If that's not enough to interest you, maybe its dividend yield of 4.2% will. Compared to competitors Microsoft's (Nasdaq: MSFT) dividend yield of 2.5%, Advanced Micro Devices' (NYSE: AMD) dividend yield of zilch, and Texas Instruments' (NYSE: TXN) dividend yield of 2%, 4.1% is definitely an attractive number. Plus with a payout ratio of 31%, Intel's dividend yield looks sustainable.

Don't give up on the market just yet
Yes, stocks have definitely shown their volatility over the last few weeks, and it's probably not the last time we'll see this happen. Still, for Foolish investors, situations like these can be seen as great companies going on sale. In the case of Intel, that is exactly what's happening.

Want more great investing ideas? The Motley Fool's free report, "13 High-Yielding Stocks to Buy Today" details 13 dividend-paying companies that just might make a great investment. With cash and Treasuries yielding mere pennies on the dollar, your best bet to beat inflation is in high-yielding stocks like the 13 The Motley Fool has uncovered. Click here to access your free report today!

Fool contributor Katie Spence loves it when stocks go on sale. She does not own shares of any company mentioned above. The Motley Fool owns shares of Microsoft and Texas Instruments. The Fool owns shares of and has bought calls on Intel. Motley Fool newsletter services have recommended buying shares of Microsoft and Intel. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Motley Fool newsletter services have recommended creating a diagonal call position in Intel. 

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Intel Corporation Stock Quote
Intel Corporation
INTC
$26.97 (-2.00%) $0.55
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$237.45 (-0.20%) $0.47
Texas Instruments Incorporated Stock Quote
Texas Instruments Incorporated
TXN
$160.46 (-0.52%) $0.83
Advanced Micro Devices, Inc. Stock Quote
Advanced Micro Devices, Inc.
AMD
$66.30 (-2.44%) $-1.66

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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