Dell Technologies

Methodology

Dell's PC and enterprise infrastructure business shows moderate cyclicality tied to corporate IT spending and refresh cycles, requiring attention to demand cycle positioning. The company's AI server opportunity creates earnings upside but adds uncertainty to baseline projections. Fair value works best using normalized demand assumptions and sustainable infrastructure margins rather than peak cycle conditions.

Methodology

Dell typically trades at very low PEG ratios (0.3-0.8x) reflecting market concerns about PC market maturity and competitive pressures in enterprise hardware. AI infrastructure demand provides growth catalyst but sustainability remains uncertain. PEG appears extremely cheap but reflects skepticism about long-term earnings power in commoditized hardware markets.

Methodology

Dell pays a modest dividend yielding 2-3% while aggressively repurchasing shares, making PEGY more attractive than PEG alone. The company generates substantial free cash flow from its asset-light model. Total return benefits from meaningful shareholder yield through dividends and buybacks, though execution risks in AI servers create uncertainty.