I got EMC because I like its subsidiary Vmware, which is the heart of Cloud computing and has a market cap of $48 B with revenue of $22 B.

Vmware is hugely more expensive (P/E=40), doesn’t pay dividends and has a market cap of $36.00 B with revenue of $5B.

P/E number show a cheap company forecasted to grow quite well

Trailing P/E: 18.70

Forward P/E (fye Dec 31, 2014)1: 11.35

Past growth is not bad either:

Qtrly Revenue Growth (yoy): 5.70% is ok

Qtrly Earnings Growth (yoy): 7.80% is pretty good too

4 B cash result in (P-cash)/E = 17 now and below 10 as a forecast.

Forward Annual Dividend Yield: 1.60% is nice on a technology company owning the cloud computing big player Wmware.

2 responses to “I wanted Vmware (VMW), but ended up getting EMC, its mother company which is cheaper, and gives dividends”

  1. Warren Myers (@warrenmyers) Avatar

    EMC is a great company, but even back at the end of 2013, I would’ve told you you were wrong.

    VMware is commoditizing hardware – a Good Thing(tm). EMC is in the hardware business. Nothing wrong with being in hardware, but VMware’s products don’t care where the servers, network, and storage come from. That’s a problem for EMC. If EMC doesn’t keep its lead in storage (and there were great competitors 15 months ago, let alone the offerings today), then it loses in the long run in favor of its “subsidiary” VMware.

  2. deminvest Avatar

    Yep, big big mistake. I am afraid I am doing one today. I will again go for the safer bet (Alibaba) rather than the overgrower (VIP Shop)

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