The technology sector is filled with a wide variety of stocks performing at different levels. Some stocks seem to be doing well, while others look to be on a downward trend. Investors need to know which stocks should be a part of their portfolio and which stocks they need to avoid. In this article, we take a look at some stocks from this sector that have been doing quite well and are expected to continue their performance in the future.
Intel (INTC) is a designer, manufacturer, and seller of digital technology platforms. It has a market capitalization of $135.34 billion and its stock is currently trading near yearly highs at around $27 per share. Intel generated a profit margin of 24% and a return on equity of 27.15%. It offers a dividend yield of 3.1%.
Intel has a gross margin of 62.5% and an operating margin of 32.4%. Advanced Micro Devices, Inc. (AMD), on the other hand, has a gross margin of 44.8% and an operating margin of 7.2%. Intel’s five year expected PEG ratio of 0.95 times is lower than that of AMD at 1.1 times, indicating that future growth at Intel can be bought at a relatively cheaper price. Intel’s price-to-earnings ratio of 11.2 times is lower than that of NVIDIA (NVDA) at 16.8 times. Intel reported an increase in profits of 6% in the last quarter. It is also one of the most active Nasdaq-traded stocks. With its new lineup of processors looking to join the company’s pipeline, Intel may well be headed for an upward trend. It is already in a better financial position than its peers.
IBM (IBM) is a provider of information technology products and services. The company has a market capitalization of $229.4 billion and its stock is currently trading at around $198 per share. It generated a profit margin of 14.8% and a return on equity of 73%. It is offering a dividend yield of 1.5%.
IBM’s gross margin of 46.9% is higher than that of Hewlett-Packard’s (HPQ) gross margin of 23.3%. Its operating margin of 20% is also higher than that of Hewlett-Packard which is at 8.4%. It has a five year expected PEG ratio of 1.2 times, while Hewlett-Packard has the same ratio at 1.5 times. Warren Buffet’s Berkshire Hathaway recently bought shares of IBM, giving the company an extra vote of confidence. Its strong business model and huge structural transformation will ensure that the company keeps generating high returns for investors.
Google (GOOG) is a provider of an online search engine and other online content for users and advertisers. It has a market capitalization of $198.3 billion and its stock is currently trading at around $610 per share. Google has a profit margin of 25.7% and a return on equity of 18.7%.
Google’s gross margin of 65.2% is significantly higher than that of AOL, Inc.’s (AOL) at 28%. Google’s operating margin of 32.3% also beats AOL’s operating margin of 3.9%. Google has a five year expected PEG ratio of 0.8 times while AOL has a ratio of 3.8 times and Yahoo! Inc. (YHOO) has a ratio of 1.6 times. With the Mobile World Congress 2012 nearing, many companies are looking to release their new phones with Google’s Android OS. Speaking of Android, Google’s acquisition of Motorola, which was done keeping the future of the Android OS in mind, looks to be quite promising not only for the company but also for its investors. Google is also working on its unique project that may be the “Next Revolution” in the technology sector.
Apple (AAPL) manufactures and sells mobile communication devices, music players, and personal computers. It has a market capitalization of $487 billion and its stock is currently trading at around $522 per share. Apple generated a profit margin of 25.8% and a return on equity of 45.6%.
Apple has a gross margin of 42.4% and an operating margin of 33.9%. Research in Motion Ltd (RIMM), on the other hand, has a gross margin of 38.6% and an operating margin of 15.2%. Apple’s five year expected PEG ratio of 0.6 times is significantly lower than that of Research in Motion’s at 18.7 times. Apple’s price-to-sales ratio of 3.77 times is near the industry average of 3.66 times. Apple is lauded as the new IBM of the technology sector due to its high earnings that continue growing. It is one of the most valuable companies in the world that just keeps growing faster than its competitors and is expected to continue doing so. Financials show that the economy’s recovery would have looked bleaker had it not been for Apple.
Sirius XM Radio (SIRI) is a provider of satellite radio services in the U.S. and Canada. It has a market capitalization of $8.26 billion and its stock is currently trading at around $2 per share. It generated a profit margin of 14.2% and a return on equity of 93.7%.
Sirius’ gross margin of 62.8% is higher than that of its competitor- Cumulus Media (CMLS) at 41.2%. Sirius also had a better five year expected PEG ratio of 1.5 times while Cumulus has shown a ratio of negative 7.85 times. Car sales are expected to increase in 2012, which will contribute to an increase in customers for Sirius. The company is looking at a triumphant week ahead as investors expect the share price to increase in the near future. Analysts also point to a few positions that the company can take in order to further see a rise in share price.