DELL Attracts Value Investors With 5.5x P/E And 3.5% Yield
Around 2 quarters ago, the tech giant Dell Technologies started paying dividends on a quarterly basis to its investors. A few days ago, the company announced another dividend of 33 cents to the investors. If we look at all the previous dividend payments, it appears that the tech company is paying a 3.5% dividend annually or around $1.32 per year.
At the time of writing this article, the stock price was around $37.70, which makes it one of the most attractive tech stocks with a high dividend yield. Considering the rich history and market penetration of Dell Technologies, it makes sense to pick Dell from other tech stocks.
For Jan 2023, the company's earning projections are expected to be around $6.80, which is a great number. This EPS number was produced by looking at the opinions of 19 different analysts.
There are also some analysts who have projected an EPS of around $7.07 for the current year to 2024. Based on this value, the Dell stock has a 5.3x forward multiple.
These numbers tell us that the current valuation of Dell is very cheap, and that's why the value investors are flocking toward it.
Positive Cash Flow & Shares Buy Back Program
The company announced its financial results for Q2 2023, in which the earnings per share (GAAP diluted) was around $1.68.
Furthermore, the company also managed to dish out a cash flow of $700 million. On top of that, the FCF of Dell was also around $300 million, which is a healthy number.
Through the dividend payments and the buybacks, the company plans to return anywhere from 40% - 60% of the FCF (adjusted) to the shareholders.
In the fiscal 2nd quarter, the company paid a total of $608 million for around 13.6 million shares. On average, this comes to around $44.71.
Considering the economic situation of the USA and other countries, it is a rare sight to find a tech company so strong and stable. On top of that, the company is also paying dividends and has a good EPS value. All of these factors make it a prime stock for value investors!