Strong balance sheets cut their risk

Article Excerpt

Computer-chip technology changes rapidly. New advances keep driving down chip prices and profit margins. To lower your risk, we look for companies that have the financial strength to keep developing new products. Here are four high-quality chip-related stocks that we see as buys. All four are in a strong position to gain from rising consumer and business spending on new computers and other devices. INTEL CORP. $23 (Nasdaq symbol INTC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 5.5 billion; Market cap: $126.5 billion; Price-to-sales ratio: 3.1; Dividend yield: 2.7%; WSSF Rating: Above Average) is the world’s largest computer chip maker. It controls about 80% of the market. Intel spends around 15% of its revenue on research. The resulting new chips have helped spur the company’s sales and earnings. Moreover, consumers and businesses have been upgrading their computers to get Microsoft’s new Windows 7 operating system. Microsoft also plans to start selling a new version of its Office software suite later this year…