Cashing in on the data revolution
The downside to this share is that its price-to-earnings ratio is 53. But like most excellent tech companies this year, that’s par for the course. It also offers a dividend yield of 1.2% and earnings per share are 57p.
One of the key factors Warren Buffett looks for in a company he’s considering buying shares in is an economic moat. That means he looks to see if it has a competitive advantage over its peers. In the case of Experian, it absolutely does. It’s been gathering and analysing consumer credit information for decades, which means its database of records is extensive. Despite its consumer facing image, it generates 80% of its revenue through its business-to-business processes.
Market penetration. Source: dotDigital
It has shown strong performance both in the UK and internationally. According to its 2019 annual report, the marketing automation market is predicted to grow to $25.1bn by 2023. It hopes to take full advantage of this and is further enhancing its AI-driven and machine learning capabilities, to focus on continued growth.
dotDigital has a market capitalisation of £430m and price-to-earnings ratio is 50. Earnings per share are 2.8p and its dividend yield is 0.4%. As its share price is now trading on an all-time high, I’d deem this expensive, but I think it has a strong future ahead and I’d consider buying dotDigital shares during a market crash. I think both these stocks would be a good addition to a long-term investor’s Stocks and Shares ISA.
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us better investors.” data-reactid=”72″>Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Kirsteen has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Microsoft and Shopify. The Motley Fool UK has recommended dotDigital Group, Experian, and Lindsell Train Inv Trust and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
Motley Fool UK 2020