Dell's Dividend Yields 3% and the PE Multiple Is 8.5; Is It a Buy?

Dale (Dale) – Get a free reportStock has been volatile lately.

Shares rose 3.3% on Tuesday, nearly touching their 3.8% tumble on Monday. They gained nearly 4% on Friday. On Thursday, they were up 6% at one point and finished up just 1.45%. It fell 5.3% last Wednesday.

Evidently, investors couldn’t make up their minds after the computer giant’s earnings report on Thursday, June 1st.

The company beat the high and low end of analyst expectations, but sales were down 20% year-over-year, and management’s guidance for the next quarter fell short of analyst expectations ($20.7 billion vs. $21.1 billion).

Investors will likely grapple with some of Dell’s more positive attributes against the current struggle in its business.

Don’t Miss: Coinbase Stock: Buy the Dip or Avoid It Next SEC suit?

For example, the shares are currently trading at 8.5 times this year’s earnings forecast of $5.53 per share. While that’s down more than 25% from 2022, earnings of less than 10x are fairly cheap by most investors’ standards.

It helps that projections call for a rebound in revenue and earnings in 2024 (although estimates are always subject to revisions).

Moreover, the stock pays a dividend yield of 3.1%, which could also entice investors.

Of course, that doesn’t help FAANG It was in high demandwhile others such as Microsoft (MSFT) – Get a free reportand nvidia (NVDA) – Get a free reportAlso continue to perform well. In other words, there is a distinct divide between market leaders and market laggards.

Dell stock trading

As investors try to figure out if this stock is a buy or sell, Dell shares are bouncing between $45 and $47.50 and hovering around the 10-day and 21-day moving averages.

Until a clearer trend emerges in the short term, the 10-day and 21-day moving averages are not useful for traders. But if we zoom out, we will notice that the larger trend since mid-March has been to the upside.

This allows us to use the 10-week and 50-day moving averages to better gauge the stock.

While Dell stock is holding 10 weeks at the moment, I’ll be interested to see how it handles the 50-day moving average in a deeper correction.

This is because this metric currently corresponds to the first-quarter high of $43.82.

Don’t Miss: How High Can SoFi Stock Go? The chart provides a guide.

If instead, shares continue higher from here, see how Dell stock handles $47.50. Above that metric, the May high near $49 comes into play and above that, the 61.8% retracement of the 2022 range near $50.50 comes into play.

Bottom line: Over $47.50 can put $49, then $50.50 into play. A drop below $45 opens the door to a potentially stronger area of ​​support just below $44.

Get full access to real-time market analysis along with stock, commodity and options trading recommendations. Subscribe to real money pro now.