Buy Symantec (SYMC)   2 comments

Ojunker asked me about security software in the comments. I did a little digging, and turned up a gem. Specifically, a tech stock with a nice dividend!

Symantec (SYMC), a security software company, has just started paying a dividend this year, and has paid it out for 2 quarters. If they continue paying it quarterly, it will eventually reach a 4.8% yield at the current price. The payout ratio is still low (14%), but that is based on what they have already paid.

On top of that, their board of directors has authorized a $1 billion stock buy back for next year.

Symantec is top dog in their industry, with a $17 billion market cap on nearly $7 billion in revenue. Their financials are clean, with almost $1 billion in levered free cash flow. Their profit margin, at 10.9%, is typical for the industry.

If they continue to pay their dividend, I may transfer the stock to my 401(k) account (where I keep my long-term holds). In the meantime, I am adding a small position to my IRA account. Any price between $24.50 and $25 is a good price for this stock. If macro conditions (read: government shutdown) drop this stock below $24.50, I would call it a “must buy”. It is a great price for a great dividend in a growing industry.

UPDATE 3:31 pm EST: I added SYMC at $24.72.

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Posted September 30, 2013 by edmcgon in Portfolio Moves, Technology

2 responses to “Buy Symantec (SYMC)

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  1. Symantec CFO leaves for McKesson. SYMC down 1% in after hours.

    http://www.marketwatch.com/story/symantec-cfo-leaves-for-mckesson-2013-09-30?siteid=msn

    Ed, the dividend paid out the last 2 quarters was $.15/share = $.60 annualized or 2.4% at the current NAV. With the CFO leaving and the market in a downtrend, you might be able to pick this stock up under $24. 200DMA= $23.43 and RSI= 41. Good luck!

    • Thanks Zosa. I miscalculated on the dividend yield. However, with their payout ratio as low as it is, this is still a good play for a dividend increase. With the software security sector being hot right now, SYMC is still the leader of the pack.

      As for the CFO, I don’t rate that as an important position. No offense to any accountants out there, but CFO’s are easily replaceable, especially in a tech company.

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