Dell: Tons of cash, tons of cash flow

March 21, 2011

Dell, although not a company that fires the imagination, has a market cap of 28 billion, of which 12.5 billion consists of cash and investments that the company does not seem to particularly need. Dell’s free cash flow, not counting investment income, came to 2.86 billion last year, representing a yield of 18.5%. Dell will be increasing capital expenditures next year, which may cause the free cash flow yield to decline to the 2.5 or 2.6 billion area, in order to continue their strategy of modest growth. I wouldn’t rely on growth, but I’ll definitely take the amazing yield.

For my full analysis, see

Leave a Reply