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3 Dividend Opportunities in Technology

For investors willing to weather the storm in the semiconductor space, we like Intel, KLA-Tencor, and Lam Research.

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Brian Colello: There are three names with healthy dividends in technology that we'd like to highlight, all in the semiconductor space. They've been beaten down due to a near-term slowdown, but we think these are the times when it makes sense to buy moaty businesses that are poised to recover when the industry upturn begins. It may get worse before it gets better, but when the pickup in demand happens, it's often too late.

First is Intel. We have a $65 fair value estimate and see the stock as 25% undervalued. Intel has been beaten up due to a CEO transition and manufacturing delays, but we think it's a wide-moat firm that will ultimately recover from its missteps. The firm is still well-positioned, not only as the dominant PC processor supplier, but also the dominant server and data center chipmaker. With growing opportunities in automotive, artificial intelligence, and 5G, Intel is highly profitable and we think the dividend is safe.

Brian Colello does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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