One key to being a successful tech company is making sure that you can keep innovating to stay ahead of your rivals. Both Micron Technology (NASDAQ: MU) and Intel (NASDAQ: INTC) are leaders in a cutthroat niche of the IT sector, and they've both had to make sure to adapt to changing conditions in order to hold on to their respective leadership roles. Intel's historical dominance in PC processors has waned in importance with the onset of mobile devices, while Micron's memory chips face supply-and-demand cycles that reflect ever-changing conditions in the industry.

As the stock market in general, and the tech sector in particular, have started to see more-volatile trading conditions, investors looking to add to their exposure want to know whether one of these stocks is a smarter pick than the other. Let's look at how Micron and Intel compare on some key metrics to see which is a better pick right now.

Image source: Micron Technology.

Valuation and stock performance

Both Micron and Intel have done extremely well over the past year, but Micron ends up on top. Since May 2018, Micron has delivered an amazing 85% return to shareholders, compared to a still-impressive 53% rise for Intel shares.

When you look at standard earnings-based valuations, you can see the different ways that investors evaluate these businesses. Intel's trailing earnings multiple of nearly 28 is slightly inflated by a one-time earnings hit due to the deemed repatriation of overseas profits required by the new tax reform laws. But its forward multiple of 14 shows in part the market's recognition of the chip market potentially being at a high point in its business cycle. That shows up even more clearly in Micron's valuation, with a trailing multiple of eight and a forward multiple of just over five. Micron has the advantage in terms of valuation despite its stock's outperformance recently, as investors appear more skeptical about Micron's future prospects.

Dividends

Tech stocks aren't well known for their dividends, and if income's important to you, then you really only have one choice between these two stocks. Micron doesn't pay a dividend, while Intel's current yield of 2.2% is quite healthy.

Intel has put together a consistent track record of dividend growth, with modest yet solid annual growth rates typically in the 5% to 10% range. Even with earnings artificially depressed right now, Intel's payout ratio of about 60% shows that the payout is sustainable as well. Micron, on the other hand, has emphasized strengthening its balance sheet by using available cash to pay down debt, and at an industry conference late last year, CEO Sanjay Mehrotra suggested that while a dividend is possible in the long run, it's unlikely to happen this year. If you need dividends, Intel's your best bet for the foreseeable future.