Symantec: This Creativity Powerhouse Deserves Investors' Attention
Michael is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Symantec Corporation (NASDAQ: SYMC) is a famous name in the information world. It is a darling of both individuals and organizations. Its software inspires confidence as it covers more risks at a larger number of points. And who doesn’t want more security? The more the better.
This company, which was born in 1982 as the brainchild of computer scientists with a vision, has evolved to earn the distinction of one of the world’s biggest names in software, boasting more than 18,500 employees in 50 countries.
Expect to pay about $16 per share which is close to its yearly low of $15.36, its high having been $20.5. It does not give any dividend. The earnings per share is $.88 and price to earnings ratio is 18.52. It has a mean target price of $21.71 and a high target of $25.
Its competitor, the also famous Microsoft Corporation (NASDAQ: MSFT) has a market capitalization of $237 billion versus that of Symantec which is $12 billion. Microsoft has 90,000 employees and its quarterly year-on-year revenue growth is less than Symantec’s, the former being 7.3% and the latter being 13.6%. Microsoft had revenue of $71.12 billion, the earnings per share is $2.75, and price to earnings ratio is 10.27. Symantec has revenue of $6.61 billion. It doesn’t stack up so well against its competitor.
Symantec caters to people, small businesses, and massive organizations as well. Its coverage is so wide and that is very inspiring. It provides answers to storage, security and systems management questions, and challenges with speed and efficiency.
With a debt of $2.01 billion its debt-equity ratio is quite all right at 53.38, most recent quarter. Its current ratio is 0.88. A bit low.
Symantec is a good buy for reasons of its reputation, and its solid foundation, good growth figures, high demand for its products, and optimistic price projections. Its debt-equity ratio is fine as well, though everyone’s aim should be to diminish and eliminate debt as fast as possible!
Late 2011 saw this company in the news a lot. The Federal Bureau of Investigation gave it high praise (and offended others for sure) by choosing its Clearwell eDiscovery Platform to streamline investigations. This is awesome as it helps investigators manage and analyze documents more efficiently, and exchange, peruse, export, tag, and search documents as well. Time, resource and effort are optimized, resulting in major economies. In a word, money and time are saved, and cost is reduced while efficiency increases and investigators are happier as it reduces the workload on them. Duplication is minimized, and Carewell provides such comprehensive benefits that all aspects of the trial and prior and ensuing procedures benefit.
Symantec’s growth figures are all non-red so that is a good thing! Growth for 2012 is projected as 14.8% and that for 2013 at 10.4%. The past 5 years’ growth per annum was 7.73% and that for the next 5 years is 9.64% per annum.
When this company came out with its security report, there were certainly many raised eyebrows in terms of the results relayed. The 2011 SMB Threat Awareness Poll revealed that Small and Medium Businesses are not the targets of cyber attacks. This explains their hesitation to invest in security measures. The reason for conducting this poll was to gauge the awareness of small and medium business about security breaches and to find out how well protected they are, should they fall prey to some such situation.
Though the demand for Symantec’s security measures in the aforementioned section of the economy is low, individual consumer awareness sure is improving as, in 2011, about 800 million people looked into its VeriSign trust seals. And that was per day, showing an increase of 60% over the previous year and making it the fifth year in a row that daily seal views have gone up. Why is this so significant? It is because it increases the confidence of site visitors to know that the site operator’s identity has been authenticated and daily malware scans are being performed. All consumers want is to feel safe when they shop online. It is like throwing your credit card information into the wild and wide blue yonder, so you want some sort of boundaries. Trust seals do just this. They are like a security blanket, and they are especially useful as they give businesses an advantage during the busiest times of year like the holidays.
Creativity is a major hallmark of the Symantec atmosphere. This company is constantly evolving with life as we know it, always rising to meet consumers’ ever increasing needs. Its service motive is extremely laudable which is capable of being translated into profits as well. It plays a leading role in certification programs.
In a world where there is so much information to be managed and kept safe, Symantec is a much sought after name. It has its place in the portfolio of many an investor as well, what with 7,208,300 shares having been traded on an average in the past quarter.
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