Within the high-tech sector, options abound. The most successful companies are those with a highly diversified product offering than can adapt to constantly changing market situations, and usually have a bid in the mobile technologies sector. In this article we will look into three of these cases:
Google Inc (NASDAQ:GOOG), Broadcom Corporation (NASDAQ:BRCM) and QUALCOMM, Inc. (NASDAQ:QCOM).
A Stock in Constant Innovation
Google is one of the most common examples used when people talk about a successful company. One can understand why its stock is so pricy, trading at $829.61 (May 2). However, valuation-wise, it exchanges at discount to its peers, at 23.7 times its earnings, versus the 48.1 times industry mean, and very close to its 10-year low of 16.29 (the maximum was 161.5). Most analysts recommend buying this stock at the moment; below you will find the main reasons to back this advocacy:
In the second place, few other companies hold such an impressive execution track record like this firm. Over the past five years, revenue has grown at a compound annual growth rate of 18.1%, gross-profit growth rate of 16.7% and operating-profit growth rate of 6.3% (Zacks Research). In addition, over the years, the management has accomplished a series of very successful acquisitions like Picassa, Android, YouTube, Motorola Mobility, Ad Mob an another 120.
Google Inc (NASDAQ:GOOG) is a dominant search engine in all of North and Latin America, Eastern Europe and most of Asia/Pacific countries. Constantly enlarging its market share, Google seems to offer compelling growth prospects as the market enlarges.
The list of Google Inc (NASDAQ:GOOG)’s attributes also includes a leading position in the mobile market, a growth segment at the moment, the launch of its digital wallet, its strong financial position (especially the absence of long-term debt), profitability and growth.
Continued Growth
QUALCOMM, Inc. (NASDAQ:QCOM) is another of those consensus-generating companies. Most analysts, from Goldman Sachs to Barrons and Morningstar, rate this company’s stock as a strong buy, especially as its current valuation at 17.8 times earnings is close to a 10-year minimum and forward P/E looks even more alluring at 12.99.
Besides its outstanding ratios, including among the highest operating and net margins in the industry, at 30.4% and 28.9% respectively (and these values were about 15% higher last December), and absence of long term debt, this company offers some other interesting features that portray a promising outlook for investors: Its forward annual dividend rate is 2.3%.
The strong and continued wireless chip demand should drive earnings in the near-term. The company will benefit from the growing demand of 3G technologies and smartphones in emerging markets, particularly in China.
Last quarter’s results came in just a few days ago. QUALCOMM, Inc. (NASDAQ:QCOM) reported a 24% rise in revenue year over year, to $6.1 billion, and an increase in its dividend by 40%.
