I don’t usually invest in technology companies as I think that technology changes too fast. Change is a great part of society and it should certainly be embraced. In fact if you get it right with investing in tech companies the rewards can be substantial. My only ever 10-bagger was the Internet Business Group (IBG.L).
As an initial study into the larger technology companies which exist today I have made up the following table which features data from IBM (NYSE:IBM), Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC), Oracle (NASDAQ:ORCL) and Apple (NASDAQ:AAPL).
| IBM | MSFT | INTC | ORCL | AAPL | |
| 5 yr Average P/E | 12.7 | 13.98 | 16.64 | 18.8 | 22.92 |
| 5 yr Average Dividend | 1.78% | 2% | 2.92% | .54% | 0 |
| Rolling P/E | 11.6 | 9.3 | 9.6 | 10.4 | 11.33 |
| Current Dividend Yield | 1.75% | 2.70% | 3.35% | .8% | 1.75% |
| 5 Yr Earning History | Good | 4/5 | 3/5 | Good | Super |
| Buybacks | Yes | Some | Some | Yes | Yes |
We can see that all companies are trading on a rolling P/E (i.e. the multiple for the next 12 months) lower than the 5 year average multiple.
In most cases the dividend yield is higher than the 5 year average dividend yield.
The 5 year earnings history for each all companies, with the exception of INTC, are good and all companies have a share buy-back program (whether active or resting).
As a result of this initial information I feel that it’s worth studying this group of companies further focusing on financial positions, internal returns and new product releases which will push future growth.
Stay tuned for more posts on these companies.