Stocks for newborns: Intel for the ages

If you want to buy shares as your kid's inheritance, this chip-maker is perfect for your chip off the old block.

By InvestorPlace May 2, 2012 9:03AM

Image: Dollar sign on keyboard (© Corbis)One in a special Top Stocks series on buying stocks for newborns.


By Jeff Reeves


As the father of two girls under age 3, I am no stranger to financial planning for your family's future.


And if I could buy one stock and put it in a coffee can for 20 or 30 years, I would buy Intel (INTC).


Some techies might be wary, considering the waning of the PC. However, the smartphone surge and tablet craze actually haven't slowed Intel in the short term, and its long-term future is bright.


Intel shares gained 19% in 2011 and are up by almost as much in 2012, putting the stock above its 2007 peak. It's no surprise why -- revenue has gone from $37.6 billion in fiscal 2008 to $54 billion last year.


Intel has a roughly 16% share of the entire semiconductor market, the largest in the world and one that blows away the 9% share of No. 2 Samsung. And after all, computer chips are in everything from toasters to lawnmowers these days, so demand is growing all the time even as mobile is on the rise.


It's not like Intel is sitting out trends in consumer technology either. It is pushing forward with its own smartphone technology powered by Atom processors. While INTC admittedly is a bit late to this game, don't count it out.


Also, with a huge cash hoard, Intel has been getting more aggressive with acquisitions and made a very shrewd buy of online security provider McAfee in 2010. A more wired world means more demand for security. Intel also is getting into cloud computing and has some promising next-generation PC chips for ultrabooks.


The icing on the cake is that thanks to its huge semiconductor output, the reliable revenue at INTC allows for a reliable dividend. The company currently yields 3% per share and is due for another dividend increase soon.


There certainly are short-term pressures on Intel, including the fact that it's playing catch-up on mobile chips and that overseas spending could hurt demand and weigh on margins. But Intel is the 900-pound gorilla of chip-making. And though I am reluctant to make any assumptions about the world my two girls will live in a few decades from now, I am certain computer chips will be even more ubiquitous than they are today.


The world our children live in will be even more high-tech, and you can be sure Intel will be there to cash in. That makes it a strong buy for the long term.



Jeff Reeves is the editor of InvestorPlace.com, and the author of "The Frugal Investor's Guide to Finding Great Stocks." Write him at editor@investorplace​​.com or follow him on Twitter via @JeffReevesIP. As of this writing, Jeff Reeves did not own a position in any of the investments named here. 



Related Articles

1Comment
May 2, 2012 6:55PM
avatar
Jeff, As a father of seven and grandfather of 12 or so with forty years as an insurance and financial adviser, i can assure you and your readers that the best can for your kids money is a whole life insurance policy.  Jeffrey Reeves MA, EUREKONOMIST™
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

124
124 rated 1
266
266 rated 2
452
452 rated 3
702
702 rated 4
671
671 rated 5
604
604 rated 6
640
640 rated 7
495
495 rated 8
267
267 rated 9
158
158 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
ABBVABBVIE Inc10
ATVIACTIVISION BLIZZARD Inc10
CTSHCOGNIZANT TECHNOLOGY SOLUTIONS10
LUVSOUTHWEST AIRLINES CO.10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.