02-22-2017, 11:39 AM
Ok guys, here is what I see.
Positives:
Good sector with a lot of potential both now and in the future
Great EPS growth in recent history
Nice cash generation
Low payout ratio
Cash > debt
Negatives:
Tech (you never know when something new comes up and completely changes the game)
Share price is close to ATH
Minimal yield of around 1.1%
Very slow dividend growth
Obviously I'm worried about the 3 things in the negatives column.. the share price is not a crucial thing seeing as this would be a very long term investment, however I do get the feeling that if I buy now I might be a little late to the party. The valuation isn't that bad though when looking at how well 2017 has started.
As for the dividend. Well that profit has to go somewhere... debt is not an issue (especially at today's interest rates) and the company does seem to be slowing down it's repurchases, though it's still making them but not nearly as fast as it has done in recent history. So... where does the cash go? They will obviously have to find some use for it, though as of right now I can't find any info on the dividend being a priority... but they could certainly afford to start raising it.
So... it looks interesting but doesn't really fit well into the whole dividend growth way of thinking. At least not yet.
What do you guys think?
Positives:
Good sector with a lot of potential both now and in the future
Great EPS growth in recent history
Nice cash generation
Low payout ratio
Cash > debt
Negatives:
Tech (you never know when something new comes up and completely changes the game)
Share price is close to ATH
Minimal yield of around 1.1%
Very slow dividend growth
Obviously I'm worried about the 3 things in the negatives column.. the share price is not a crucial thing seeing as this would be a very long term investment, however I do get the feeling that if I buy now I might be a little late to the party. The valuation isn't that bad though when looking at how well 2017 has started.
As for the dividend. Well that profit has to go somewhere... debt is not an issue (especially at today's interest rates) and the company does seem to be slowing down it's repurchases, though it's still making them but not nearly as fast as it has done in recent history. So... where does the cash go? They will obviously have to find some use for it, though as of right now I can't find any info on the dividend being a priority... but they could certainly afford to start raising it.
So... it looks interesting but doesn't really fit well into the whole dividend growth way of thinking. At least not yet.
What do you guys think?