Dell, Inc. DELL(NAS) Profile Profile
Dell, Inc. DELL (NAS) Last Close
Industry
13.85
Computer Systems Hardware
USD
Sector
Profile Pricing data through 10 Feb 2011
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Contents Company Profile
1
Company Data
2
Management & Ownership
3
Industry Focus
4
Dell Inc. a Delaware Corporation was founded in 1984. As a technology company, it offers a broad range of product categories, including mobility products, desktop PCs, software and peripherals, servers and networking, and storage. The Company’s services include a broad range of configurable IT and business related services, including infrastructure technology, consulting and applications, and business process services. The Company’s four global business segments are: Large Enterprise, Public, Small and Medium Business, and Consumer. It designs, develops, manufactures, markets, sells, and supports a wide range of products and services that can be customized to individual customer requirements. The Company’s products and services are organized between enterprise solutions and client categories. Enterprise solutions include servers, storage, and related services, software and peripherals. Client includes mobility, desktop products, and also related services, software and peripherals. The Company’s services include a broad range of configurable IT and business services, including infrastructure technology, consulting and applications, and business process services. It also offers or arranges various customer financial services for its business and consumer customers in the U.S. The Company’s standards-based PowerEdgeTM line of servers is designed to offer customers affordable performance, reliability, and scalability. Options include high performance rack, blade, and tower servers for enterprise customers and value tower servers for small organizations, networks, and remote offices. Its PowerConnectTM switches connect computers and servers in small to medium-sized networks. PowerConnectTM products offer customers enterpriseclass features and reliability at a high value to its customers. It offers a comprehensive portfolio of advanced storage solutions, including storage area networks, networkattached storage, direct-attached storage, disk and tape backup systems, and removable disk backup. Its suite of scalable support services is designed for IT professionals and end users whose needs range from basic phone support to rapid response and resolution of complex problems. It also offers a full suite of solutions for customers who desire outsourcing of some or all of their IT management and
operations. Its consulting services include IT consulting, strategy consulting, enterprise consulting, the implementation of prepackaged software applications, and research. It offers Dell-branded printers and displays and a multitude of competitively priced third-party peripheral products such as printers, televisions, notebook accessories, mice, keyboards, networking and wireless products, digital cameras, power adapters, scanners, and other products. The AdamoTM and AlienwareTM lines of notebook computers are targeted at customers seeking high-quality experiences and cutting edge designs, and range from sleek, elegant, thin, and light notebooks to the high performing gaming systems. The StudioTM line of consumer notebooks contains powerful multimedia elements. The LatitudeTM line is designed to help business, government, and institutional customers manage their total cost of ownership through managed product lifecycles. The VostroTM line is designed to customize technology, services, and expertise to suit the specific needs of small businesses. It targets sales of the AlienwareTM line of desktop computers to customers seeking features ranging from multimedia capability to high performance gaming. It offers or arranges various customer financial services for its business and consumer customers in the U.S. through Dell Financial Services L.L.C. (DFS), a wholly-owned subsidiary of Dell. DFS offers a wide range of financial services, including originating, collecting, and servicing customer receivables related to the purchase of Dell products. The Company’s business is subject to regulation by various federal and state governmental agencies.
©2009 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
Page 1 of 5
Morningstar StockResearch Data Sheet Morningstar®Equity
Pricing data thru Feb. 10, 2011
Dell, Inc. DELL
Sales USD Mil Mkt Cap USD Mil Industry
Sector
60,702
26,735
Hardware
Fair Value
Uncertainty
Nearly two thirds of Dell's revenue is derived from Nearly two thirds of Dell’s revenue is derived from endpoint endpoint devices (PCs and related peripherals) for consumer and devices (PCs and related peripherals) for consumer and enterprise use. Dell provides notebook computers (31% of enterprise sales), desktop computers (28%), software and other use. Dell provides notebook computers (31% of sales), peripheral equipment (17%), servers and networking desktop equipment (10%), storage (4%), and services (9%). computers (28%), software and other peripheral equipment Historically, Dell was a direct distributor, but it has been (17%), building its retail presence in an effort to boost sales servers and networking equipment (10%), storage (4%), and growth. services
Morningstar Rating
Last Price
-QQQ 31.32 16.01
31.06 21.90
-
13.85
37.18 22.59
42.57 31.14
32.24 18.95
Economic Moat
26.04 8.72
TM
17.26 7.84
17.52 11.34
Growth Rates Compound Annual 1 Yr
3 Yr
5 Yr
10 Yr
-13.4 -31.9 -41.6 . 31.2 0.7 -47.1 -23.1
-2.7 -10.9 -13.8 . 14.2 -10.7 -33.2 -10.5
1.5 -12.6 -9.2 . 2.0 -15.3 -32.6 -16.1
7.7 -0.4 1.8 . 3.3 -6.6 -15.1 -6.0
Grade: C
Current
5 Yr Avg
Ind
Return on Equity % Return on Assets % Fixed Asset Turns Inventory Turns Revenue/Employee USD K
34.5 6.0 30.9 44.6 632.3
58.5 10.2 25.8 62.9 672.9 *
13.0 4.6 10.5 19.3 .
17.4 4.6 3.4 5.5 1.1
17.8 5.6 4.5 5.4 0.0
32.1 14.1 4.5 13.1 .
39.2 14.3 9.5 0.1 9.8
Revenue % Operating Income % Earnings/Share % Dividends % Book Value/Share % Stock Total Return % +/- Industry +/- Market
Price Volatility 39.0 19.0
5.0
Bear-Market Rank 6 (10=worst) Trading Volume Million
19.0
2001
2002
2003
55.9 68.9 30.4 . 70858
-1.6 21.8 20.1 . 68968
27.1 24.0 0.7 15.0 -0.1 11.6 . . 87003 104689
2004
2005
2006
2007
2008
2009
2010
YTD
Stock Performance
-28.9 -31.9 -27.2 . 70488
-16.2 -29.8 -33.7 . 56098
-2.3 -5.8 -34.4 . 54927
-58.2 -19.7 -20.6 . 19911
40.2 16.8 -31.2 . 28098
-5.6 -18.4 -29.4 . 26155
2.2 -2.9 -9.5 0.0 26735
Total Return % +/- Market +/- Industry Dividend Yield % Market Cap USD Mil
2003
2004
2005
2006
2007
2008
2009
2010
TTM
35404 17.9 2844 8.0
41444 18.2 3544 8.6
49205 18.3 4254 8.6
55908 17.8 4347 7.8
57420 16.6 3070 5.3
61133 19.1 3440 5.6
61101 17.9 3190 5.2
52902 17.5 2172 4.1
60702 17.4 2798 4.6
Revenue USD Mil Gross Margin % Oper Income USD Mil Operating Margin %
Mkt
2177
1246
2122
2645
3043
3572
2583
2947
2478
1433
2042
Net Income USD Mil
21.7 8.5 7.2 14.6 896.4
0.79 . 2746 1.83
0.46 . 2726 1.80
0.80 . 2644 2.30
1.01 . 2619 2.37
1.18 . 2568 2.05
1.46 . 2449 1.52
1.14 . 2271 3.05
1.31 . 2247 2.14
1.25 . 1986 2.57
0.73 . 1962 3.53
1.04 . 1964 3.53
Earnings Per Share USD Dividends USD Shares Mil Book Value Per Share USD
4195 -482 3713
3797 -303 3494
3538 -305 3233
3670 -329 3341
5310 -525 4785
4839 -728 4111
3969 -896 3073
3949 -831 3118
1894 -440 1454
3906 -367 3539
3754 -402 3352
Oper Cash Flow USD Mil Cap Spending USD Mil Free Cash Flow USD Mil
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
TTM
Profitability
17.5 39.8 6.8 2.56 2.4
9.2 24.2 4.0 2.31 2.9
14.6 44.4 6.0 2.44 3.2
15.2 47.4 6.4 2.38 3.1
14.3 47.7 6.2 2.31 3.6
15.4 67.3 6.4 2.41 5.6
10.6 61.1 4.5 2.36 5.9
11.1 73.1 4.8 2.30 7.4
9.2 61.9 4.1 2.26 6.2
4.8 28.9 2.7 1.76 6.0
6.0 34.5 3.4 1.78 5.5
Return on Assets % Return on Equity % Net Margin % Asset Turnover Financial Leverage
10-10 USD Mil
10635 1051 8543 24245
12889 1294 9995 27788
Fixed Assets Intangibles Total Assets
2181 5768 33652
1948 5812 37154
Payables Short-Term Debt Current Liabilities Long-Term Debt Total Liabilities
11373 663 18960 3417 28011
11278 826 19095 5168 30341
5641
6813
Valuation Analysis 5 Yr Avg
Ind
Mkt
13.3 9.2 7.3 8.1 . 3.9 0.5 1.2
15.7 . 10.3 12.7 . 7.8 0.7 .
18.8 . 12.6 15.4 0.6 5.3 2.0 .
16.5 14.1 8.6 17.3 1.7 2.3 1.4 1.6
Financials
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
10-10
Financial Health
2948 509 5622 0.09
358 520 4694 0.11
-9 506 4873 0.10
-263 505 6280 0.08
2761 505 6485 0.08
1779 504 4129 0.12
2148 569 4328 0.13
1354 362 3735 0.10
5292 1898 4271 0.44
5285 3417 5641 0.61
8693 5168 6813 0.76
Working Capital USD Mil Long-Term Debt USD Mil Total Equity USD Mil Debt/Equity
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
TTM
Valuation
61.0 . 2.4 14.8 18.8
36.0 . 2.1 14.8 20.7
35.6 . 2.3 14.8 23.8
34.8 . 2.3 17.8 23.9
23.1 . 1.4 14.6 14.7
19.9 . 1.0 16.5 13.3
18.5 . 0.9 8.0 13.9
7.5 . 0.3 4.8 8.9
19.4 . 0.6 5.6 8.3
13.0 0.7 0.4 3.8 7.1
13.3 0.8 0.5 3.9 7.3
Price/Earnings P/E vs. Market Price/Sales Price/Book Price/Cash Flow
Quarterly Results Current
*3Yr Avg data is displayed in place of 5Yr Avg
10 Year High/Low 42.57 - 7.84
2002
01-10 USD Mil
Price/Earnings Forward P/E Price/Cash Flow Price/Free Cash Flow Dividend Yield % Price/Book Price/Sales PEG Ratio
52 week High/Low 17.52 - 11.34
31168 17.7 1789 5.7
Cash Inventories Receivables Current Assets
Total Equity
2.0
Monthly High/Low Rel Strength to S&P 500
2001
Financial Position Grade: C
Annual Price High Low Recent Splits
31888 20.2 2663 8.4
Profitability Analysis
Gross Margin % Operating Margin % Net Margin % Free Cash Flow/Rev % R&D/Rev %
-
C per share prices in USD
14.46 12.99
One Dell WayBuilding 2 Employees: 96000 One Dell WayTXBuilding Round Rock, 78682 2 Round Rock, 78682 Phone: 1 512TX 338-4400 Phone: 1 512 338-4400Website: http://www.dell.com Website: http://www.dell.com
Grade: C
Stewardship Grade
-None
Medium 30.77 21.61
Fiscal year-end: January
Computer Systems
-
16.00 42.30 28.62
Rating updated as of Feb. 10, 2011
Revenue USD Mil
Most Recent Period Prior Year Period
Industry Peers by Market Cap Jan 10
Apr 10
Jul 10
Oct 10
14900.0 14874.0 15534.0 15394.0 13428.0 12342.0 12764.0 12896.0
Rev Growth %
Jan 10
Apr 10
Jul 10
Oct 10
Most Recent Period Prior Year Period
11.0 -16.0
20.5 -23.2
21.7 -22.3
19.4 -14.9
Earnings Per Share USD
Jan 10
Apr 10
Jul 10
Oct 10
0.17 0.18
0.17 0.15
0.28 0.24
0.42 0.17
Most Recent Period Prior Year Period
Mkt Cap USD Mil Rev USD Mil
Dell, Inc. International Busine
26735 203859
P/E
ROE%
60702 13.3 98082 14.9
34.5 70.8
Major Fund Holders % of shares
Longleaf Partners Vanguard Total Stock Mkt Idx Inv Vanguard 500 Index Investor
2.29 0.96 0.82
TTM data based on rolling quarterly data if available; otherwise most recent annual data shown.
© 2011 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported.
The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
®
ß
Morningstar Equity Research
Dell, Inc. DELL (NAS) Last Close
Industry
13.85
Computer Systems Hardware
USD
Sector
Management & Ownership Management Activity
Name
Position
Shares Held
MICHAEL S. DELL
Founder/CEO/Chairman of the Board/Director,Director DONALD J. CARTY Director STEVE SCHUCKENBROCK President, Divisional BRIAN T. GLADDEN Senior VP/CFO LAWRENCE P. TU Senior VP/Secretary/General Counsel JAMES W. BREYER Director SENATORPROFESSOR Director SAMUEL A. NUNN,JR ERIN NELSON Other Executive Officer/Senior VP
Report Date*
InsiderActivity
232,912,682
17 Dec 2010
7,370,000
465,714 389,613 269,455 253,918
14 Aug 2010 10 Jan 2011 01 Dec 2010 22 Nov 2010
40,537 30,000
165,399 89,154
08 Feb 2011 17 Sep 2010
20,000 -
82,982
08 Sep 2010
-
*Report date represents the date on which the owner's common shares held was audited.
Fund Ownership Top Owners
Longleaf Partners Mac Cundill Value Segregated Vanguard US Total Market Shares (AU) ETF Vanguard 500 Index Investor SPDR S&P 500
Morningstar Rating
% of Shares Held
% of Fund Assets
Change (k)
QQ QQQQQ
2.28 1.25 0.98 0.79 0.72
7.46 6.24 0.18 0.21 0.20
0 0 427 -501 -180
30 Sep 2010 30 Nov 2010 30 Sep 2010 30 Sep 2010 04 Feb 2011
2.28 0.01 0.02 0.01
7.46 6.77 6.41 6.28
0 0 0 7
30 Sep 2010 30 Nov 2010 28 Feb 2010 30 Nov 2010
% of Shares Held
% of Fund Assets
Shares Bought/ Sold (k)
0.16 0.34 0.08 0.37 0.13
1.25 1.08 1.52 1.58 2.43
3,100 2,490 1,611 1,294 1,206
30 Sep 2010 30 Sep 2010 31 Dec 2009 30 Sep 2010 30 Jun 2010
0.13 0.07 0.04 0.40
0.13 1.91 1.55 0.47
-3,570 -879 -785 -562
31 Dec 2010 30 Nov 2010 31 Dec 2010 31 Dec 2010
QQQ QQQ
Portfolio Date
Concentrated Holders
Longleaf Partners Mac Cundill American Class Series F Nemesis (QIF) Euro Retail ACPI Focused Equity A
QQ QQ QQQ
Institutional Transactions Top 5 Buyers
BlackRock Large Cap Core Inv A Invesco Van Kampen Comstock A Investec Global Strategy Equity A IVA Worldwide A Trimark Select Balance T8
Morningstar Rating
QQQ QQQ QQQ QQQ
Portfolio Date
Top 5 Sellers
American Funds NVIT Growth-Income II PH&N US Equity Old Mutual Focused Z PowerShares QQQ
QQQ QQQQQ QQQ
©2009 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
Page 3 of 5
Morningstar Equity Research
Dell, Inc. DELL (NAS) Last Close
Industry
13.85
Computer Systems Hardware
USD
Sector
Industry Focus: Computer Hardware Shining a Light on Global Solar Growth 04 October 2010
Stephen Simko, CFA
Senior Equity Analyst
2010 was a whitehot year for solar. Will the wattage keep pace in 2011?
During 2009's fourth quarter, the solar industry was just recovering from the brutal declines in silicon and module average selling prices, or ASPs. Companies and analysts were predicting 2009 global installations would be flat at six gigawatts (GW). At the same time, the more optimistic projections for 2010 were largely falling in the range of between nine and 11 GW. However, as installation data for the fourth quarter began to be publicized in early 2010, it became clear that the end of 2009 saw demand spike to far higher levels than almost anyone anticipated. The prime example of this was Germany, the world's largest solar market, which installed 1.46 GW in the month of December alone, or 38% of the total capacity (3.8 GW) it brought online last year. German capacity additions wound up doubling last year, and the country wound up accounting for 53% of installations worldwide. As a result, when the German government announced a special subsidy cut to occur in July of this year to cool
installation activity, concern surfaced that demand would be pulled into the first half of the year, with weakness emerging in Germany after the subsidy cuts, and with it, the resumption of module pricing declines. With the second quarter's solar results now in, it is abundantly clear that demand has remained relatively robust in Germany postsubsidy cuts, and will remain so for the rest of 2010. Additionally, attractive project internal rates of return in other countries have fueled strong installation growth elsewhere all year long. Examples would include Belgium, the Czech Republic, France, and Italy, all of which boast double-digit returns. Every major solar market seems poised to post annual growth rates of at least 50% this year. Reflecting these trends, we have updated our 2010 installations estimate to 13.6 GW, 88% above the 7.2 GW installed in 2009. Germany will again account for half of the global market, with 6.7 GW of installations occurring this year.
2011 Demand and Pricing Projections With a slowdown prior the end of 2010 becoming highly unlikely, the focus is shifting to 2011. Multiple variables will come into play that could materially impact global demand levels as well as market pricing for modules (these, along with a company's cost structure, are the three major variables that move solar stocks). On the demand side, subsidy reductions will be occurring in several key European markets. In Germany, subsidies will decline by an additional 10% on January 1. Cuts are also set to occur in other major markets such as Italy, where four separate reductions that will lower tariffs 25% by the end of 2011, and in the Czech Republic, where the government is still debating specifics. As a result, the high returns project investors are currently enjoying will come under pressure, unless a corresponding decline in the pricing of solar projects occurs. This implies that both system installers and module makers will have to reduce pricing to maintain strong demand. Furthermore, the industry has not only been
©2009 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
Page 4 of 5
Morningstar Equity Research
Dell, Inc. DELL (NAS) Last Close
Industry
13.85
Computer Systems Hardware
USD
Sector
Industry Focus: Computer Hardware bringing production capacity on line all year, but companies have recently been increasing their expansion plans in response to current demand levels. Even if demand remains robust in 2011, there is risk that supply will overshoot demand, creating pressure on module pricing.
modules below spot pricing, due to signing customer contracts before it was evident how strong solar demand would be in 2010. Though these companies are missing out on profits in the current period, their margins will be less impacted from 2011 spot pricing declines.
With these considerations in mind, we expect ASP declines to resume in the first quarter of 2011 after being flat for the last six months. However, the magnitude of ASP declines is likely to vary significantly by company. The industry's cost leaders, First Solar FSLR , Trina Solar TSL , and Yingli Green Energy YGE all are currently selling their
On the other side of the spectrum are the higher-cost manufacturers in Europe. These companies, such as Renewable Energy Corp and Solarworld SWV, have long sold their modules at a premium to their low-cost counterparts, largely since a perception remains in solar that modules made in Europe are of superior quality, especially compared to Chinese-made product. This may have been the case five years ago, but it certainly is not anymore for tier-one Chinese modules. Reports are emerging that this "European premium" has started to erode in response to the lower project returns now available in Germany.
For low-cost module manufacturers--which represent the majority of our coverage list--we are projecting 2011 ASP declines of 10-13%. For Renewable Energy Corp, our lone producer from Europe, we have updated our ASP projections, and now are forecasting ASP declines of 20%. We continue to view the pricing premiums that European manufacturers enjoy as unsustainable, and believe these will disappear completely within a few years time.
©2009 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
Page 5 of 5
