Alphabet (GOOGL) Hits $1T Market Cap First Time after stock topped $1450. Excluding $150 excess cash per share GOOGL which could earn $60 Cash EPS for 2020 is close to 22 times Forward Earnings with chances for long growth runway. Compared to AAPP at 25+ times Forward Earnings and 10 year US Bond yield of 1.77% GOOGL is relatively better valued. FB at $222 which is also at 20 times Forward Earnings excluding excess cash and has faster growth potential compares well and is attractive to GOOGL today.
Investors who purchased shares of GOOGL in last dip to $1020 in Jun 2019 or $970 in Dec 2018 due to recession fears and regulatory fears currently are up 45% on their shares and with $60 Cash EPS for 2020 their Adjusted Earnings Yield excluding $150 cash per share would be > 6%+ based on a 15 times earnings multiple. For a company that can grow revenue and earnings at 18-22% for next few years and has optionality with other bets including Cloud Business, Self Driving Tech etc this is a great proposition.
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