It was more of the same with U.S. stock markets in May, meaning that investors won’t be getting much reprieve from volatility in the near future. Virtually every U.S. stock index has more or less succumbed to bear markets. Hence, investors gravitate towards safe stocks that provide a hedge against troubling market conditions.
You invariably think about dividends with safe stocks, which have been an investing staple for the past several years. Dividends offer investors a consistent income stream, similar to fixed-income securities that have become incredibly popular. Rising interest rates have made growth stocks significantly less attractive than income-oriented stocks.
Moreover, most stocks, including the safer ones, have taken a beating with the market downturn. Therefore, the safe stock discussed in the article is trading at multi-year lows.
Intel(INTC)
Chip-makerIntel (NASDAQ:INTC) has been posting mediocre results for multiple years now, denting investor confidence.
However, it now has a clear strategy to turn its fortunes around. Its clear strategic direction could potentially lift its glowing dividend profile, which currently offers a 3.3% yield to investors.
Chipzilla plans to invest heavily in future growth through accelerated capital spending. It plans to spend $27 billion on advancing its research and development efforts. From 2026 and beyond, the management is targeting 10% to 12% annual revenue growth.
Intel’s management is hopeful that these investments will lead to strong revenue expansion for several years, stemming from its traditional and emerging businesses. For instance, it plans to investabout €33 billion in R&D in expanding its foundry services during the first quarter alone, representing a 175% bump from the same quarter last year.
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