Bill Miller seems befuddled. In his July 2010 commentary, he wonders why investors keep purchasing 10-year treasuries yielding about 3%, when companies like ExxonMobil offer much higher potential returns.

His formula for Exxon is straightforward: "A sum of the dividend yield, growth rate and share shrink could represent an attractive annual return even if the valuation stays the same, and the valuation is among the lowest the company has traded at in years." When you add up the components, Exxon could offer 16.4% returns per year in a low-return environment.

I'm no less baffled than Miller by investors' preference for bonds, but I do think he's on to something. To see whether more Miller-like opportunities like Exxon were out there, I looked for companies with:

  • A dividend yield greater than the 3% 10-year treasury yield.
  • A five-year track record of dividend growth.
  • A history of repurchasing shares.
  • A P/E less than 25.

Here's what I found:

Company

Yield

5-Yr Div. Growth

Share Shrink

P/E

Intel Corporation (Nasdaq: INTC)

3.2%

19.9%

1.6%

11.9

Advanced Micro Devices, Inc. (NYSE: AMD)

0%

0%

0%

3.9

Micron Technology Inc. (NYSE: MU)

0%

0%

0%

4.7

Source: Capital IQ, a division of Standard & Poor's.

From the table above, Intel fits Miller's criteria perfectly. It pays a 3.2% dividend that has been growing 19.9%, on average, for the past five years. The company also trades at just under 12 times earnings and produces plenty of cash flow to repurchase shares. Competitors Advanced Micro Devices and Micron Technology do not meet all of the criteria for our exercise.

Foolish bottom line
Would Bill Miller consider investing in Intel? It meets all the criteria above, and it could offer a 24.7% return over time -- although it will be a challenge for the company to maintain such a dividend growth rate. In today's low-return environment, that's pretty attractive. I don't know why the market is offering up this opportunity, but as long as it is, Intel could be worth pursuing further.

Million Dollar Portfolio associate advisor David Meier does not own shares of any of the companies mentioned. Intel is a Motley Fool Inside Value pick. The Fool owns shares of and has written puts on Intel. Motley Fool Options has recommended buying calls on Intel. The Fool owns shares of ExxonMobil. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy never goes out of style.