Re: Dell Technologies Inc(DELL)
13.33x PE
Market cap $54 Billion
1.9% dividend
I can't imagine why anyone would want to invest in boring mature Dell, regardless of the valuation Dell's revenue growth has been modest over the past 5 and 10 years:
5 year Annual Revenue Growth
- 5.3%: This reflects a period of moderate but consistent growth, with some notable fluctuations. Notably, there was a dip in 2020 due to the pandemic, followed by a strong rebound in 2022
10 Year annual Revenue Growth
- 2.0%: This indicates a longer-term trend of slower growth for Dell. The company has undergone significant acquisitions and mergers during this period, which might have affected the growth rate.
In January 1, 2020 Dell's PE was 12.47x w/ a forward PE of 10.46x
For January 31, 2023 Dell's PE was 14.75x and forward PE 15.6x
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Now the incredible statistic is the stock stock price during that same 5 year period !
Therefore, Dell's CAGR for its stock price from January 1, 2020, to December 31, 2023, is approximately 24.88%, reflecting a healthy and consistent growth over the past five years.
Will DELL's stock price perform the next 5 years with a 24.8% CAGR? To me, this is an excellent return based on the low PE. Is the market inefficient in the way it prices Dell?
My take away, is your downside risk may/could be much less if you buy at a low PE I surly want a company that books positive EPS even w/ 5.3% Revenue growth. Mr. Market appears to have price the stock at the high end. That's +275% in 5 years ($20 to $75). Nothing wrong w/ that vs buying a High Tech Growth stock w/ little to no earnings and/or AAPL at 30x PE. |
