Intel Corporation (NASDAQ:INTC) shares have gained more than 18% over the past 12 months. But the stock still looks attractive as it’s trading at a forward P/E multiple of 13.4x, which is still 13% lower than the S&P 500’s average multiple of 15.4x. Wall Street estimates Intel’s long-term earnings growth at 11.2% compared to the 9% average for S&P 500 companies.

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Intel attractively valued?

Since 2008, Intel Corporation (NASDAQ:INTC) has been increasing its dividend per share on an average of 12% a year. The chipmaker pays an annual dividend of 3.6%, almost twice that of the S&P 500 average. Intel’s management is dedicated to dividend growth, and the company’s solid cash flow generation would allow it to keep raising dividends at a similar pace. The Santa Clara-based company should further benefit from a few key developments.

PC market has been shrinking for years now. But the current corporate refresh cycle should boost PC sales as Microsoft Corporation (NASDAQ:MSFT) is going to end its support for Windows XP in April. Hewlett-Packard Company (NYSE:HPQ) and Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) (HKG:0992) both expect their PC businesses to pick up due to the same reason. Despite that Intel Corporation (NASDAQ:INTC)’s 2014 guidance forecasts PC shipments to decline in single digits, leaving plenty of room for upside.

Intel’s initiatives to start paying off

Moreover, the semiconductor company has taken several initiatives to drive long-term revenue growth. Intel Corporation (NASDAQ:INTC) plans to enter the wearable device market. The company is aggressively pushing into the tablet space with Bay Trail. Recently, the company announced that it’s going to open up its foundry business to competitors. Intel will allow its rivals to fabricate their own products at its facility. JPMorgan analyst Christopher Danely says Intel has an edge over Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) (TPE:2330), thanks to a few missteps by the Taiwanese company. He expects the Santa Clara-based company to reach production by 2016.

Intel Corporation (NASDAQ:INTC)’s foundry business should attract big customers like Apple Inc. (NASDAQ:AAPL) and Qualcomm, Inc. (NASDAQ:QCOM), as they would benefit from lower transistors and higher performance. JPMorgan says the foundry business should add at least $6.3 billion to Intel’s annual revenues and 24 cents to its EPS by 2017.

Intel Corporation (NASDAQ:INTC) shares were little changed at $24.80 in pre-market trading Monday.