Qualcomm (QCOM) - Get Report has been fighting a tough battle. In its bid to go after the server market, Qualcomm took on the biggest player in the category, the seemingly invincible Intel (INTC) - Get Report .

The companies have dividend yields that aren't too far apart: 3.6% for Qualcomm and 2.8% for Intel. But which company is the strongest and most reliable? We closely examine Intel and Qualcomm and tell you which is the better investment, for growth as well as income.

As an investor, if you're interested in chipmakers, Qualcomm probably isn't on your list of favorites right now, thanks the 29% drop in its stock price so far this year. Intel hasn't had a great 2015 either; it's stock is down 7% year to date. But it's traditionally been a more secure protector of wealth. Let's look at the pros and cons of each.

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QCOM data by YCharts

Stock Performance

Qualcomm's historical price performance isn't a clear indicator of future direction, but so far this year, Intel's stock price has outperformed that of Qualcomm's. Using trailing total returns (including dividends), Intel also performed better than Qualcomm over one-year, three-year, five-year and 10 year periods.

Earnings Card

Qualcomm has the edge over Intel as far as earnings go.

Qualcomm's double-digit rates over three, five and 10 years (for metrics such as revenue growth, operating growth and net income growth) are robust when compared to Intel's single-digit rates. For both semiconductor companies, margins are around the 25%-30% range. Free cash flow-to-net income ratios are almost identical for the past few years.

As the larger entity, Intel generates more free cash flow in absolute terms: around $10 billion. Qualcomm comes in at around $7 billion.

Strategic Strength

Intel has had a plan in place for a while now that's reaching fruition and ready to drive the stock.

The company has gained a sizable mobile share and is rumored to be the front-runner for the new designs of Apple, which is a highly coveted privilege for chipmakers.

If Intel does manage to grab Qualcomm's modem spot in Apple's next iPhone, it would translate into a major setback for Qualcomm. In fact, this could also turn out be the second in a series of major defeats Qualcomm has encountered. Samsungnixed Qualcomm mobile processors in its Galaxy smartphones.

How would Qualcomm deal with the blow? A ripple effect would lead to a lowering of prices in order to stay in the competition -- not the best way forward, by any means. Qualcomm's operating margins, already low at 23% on a trailing-12-month basis, would have to bear the brunt of a price cut. Intel's operating margin for the trailing 12 months is 26%.

Future Expectations

Intel's strategy already is paying off, if you consider analysts' expectations. Analysts expect Qualcomm's revenue will decline 7.9% in fiscal 2016, which ends September 2016. Intel's revenue is expected to decline by a marginal 1% in 2015 and increase 4% in 2016.

Although Intel hasn't had a great year, most analysts predict it will consistently beat Qualcomm in terms of EPS growth for the next five years.

Qualcomm churned out 14.5% EPS growth over the last five years, but future quarters are expected to see a slackening of the pace.

The Verdict

With a forward price-to-earnings ratio of nearly 15, Intel is assured of premium status. (Qualcomm's P/E is around 10.) To keep that premium valuation, Intel needs to increase its rate of growth, which it appears to be doing.

Based upon analysts' expectations, Intel has a price/earnings to growth ratio of 1.8, which is less than Qualcomm's 2. So, given current prices and growth prospects, Intel is still undervalued in comparison to Qualcomm.

The verdict is therefore clear: If you're looking for healthy income from a big-name tech stock that also confers the opportunity for long-term capital appreciation, Intel by far is the better bet.

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.