Intel, IBM: Uncertainty May Bring Best Values

NEW YORK (TheStreet) -- There was a lot of chest-pounding and bravado at the G8 meeting this weekend as G8 leaders promised to do whatever it takes to prevent financial turmoil and protect the worldwide economy from Europe's debt crisis.

Yet they apparently offered no remedies for the financial crisis in Greece. That would have been useful since Greece will be holding new elections in June, and the current configuration of the European Union hangs in the balance.

So it's beginning to sound like a "good-news, bad-news" situation that doesn't spell relief yet for the U.S. stock market. Markets in Asia and Europe are still tainted with nervousness as well.

Intel

At times like these filled with both high anxiety and uncertainty, investors are more motivated to hold only the best-in-breed kind of stocks. A good example is Intel (INTC).

The one-year chart on Intel (below) looks like it's experiencing a normal consolidation after a stellar ascension that began at the end of 2011.

INTC has already fallen below its 100-day moving average and may be set to test the 200-day moving average at slightly below $25-per-share. That could happen quickly in this kind of a nervous stock market.

The point to remember is that INTC is right up there with the best of the cash-rich, well-managed, tried-and-true winners like Apple (AAPL) and Microsoft (MSFT).

How many companies do you know of with over $54 billion in trailing-12-month revenue, a forward price-to-earnings ratio of less than 10 and a PEG ratio (five-year-expected) of only 0.88 that also offers a 3.36% dividend (if you're fortunate enough to buy shares at $25)?

Intel's operating cash flow of almost $20 billion and levered free cash flow of nearly $6.4 billion could render the company debt-free if it so desired. Yet what they desire most is pleasing shareholders.

Besides dividends, another way INTC helps protect its share price is through their enormous share buy-back program that has systematically taken close to 10% of the outstanding shares out of circulation over the past 18 months.

With its 23% profit margin and 32% operating margin, INTC is on a dividend-growth trajectory that will continue to be one of the best in its industry. Remember, it has more than doubled its dividend payout over the last six years.

Yes, they have some stiff competition from none other than Apple itself, but Intel is a company that continues to thrive on paranoia and out-smarting the competition.

You can still buy a copy of Intel's former CEO and Chairman of the Board Andy Grove's best-selling book "Only the Paranoid Survive" and learn more about the bedrock of Intel's corporate culture to not only survive but to thrive.

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