Jenny Harrington: ‘there’s room for Intel Corporation forever’

Intel Corporation (NASDAQ: INTC) has been an unloved stock lately, down more than 25% over the trailing twelve months. A notable name who’s sticking to it, however, is Jenny Harrington.

Harrington addresses concerns related to the Intel stock

Earlier this year, Intel said it will invest $20 billion on a chip-manufacturing mega-site in Ohio that many, including Jim Cramer, cautioned, could jeopardize dividend payments. Responding to such concerns, Harrington said on CNBC’s “Halftime Report”:

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They’ve paid a dividend for 29 consecutive years; they’ve raised it for 19 years. The FCF diminishment as they invest all this money in new foundries is very finite and after 2025, FCF completely explodes. So, I think it’s unlikely that they’ll cut dividend.

In its fiscal fourth quarter, Intel handily beat Wall Street expectations on both the top and bottom lines.

Intel Corporation is attractive in terms of valuation

Harrington agrees that the semiconductor space is up for a rough patch, considering the macroeconomic backdrop, but reiterated that Intel will remain an attractive buy in this sector from the valuation perspective.

Semis are cyclical. So, maybe they don’t deserve to trade at 30 times earnings. We’ll see more pressure across semis and we’ll see Intel’s trading at 10 times; it has probably accounted for this cyclicality. Has AMD? Has Nvidia? Maybe not. So, there’s room for Intel forever.

The CEO of Gilman Hill Asset Management also highlighted that Intel’s free cash flow will stand at $2.70 billion even after its CAPEX in 2023.