Gen Digital

Methodology

Gen Digital's consumer cybersecurity products (Norton, Avast) generate highly predictable subscription revenue with strong retention from auto-renewals. The company faces structural headwinds from free security software and operating system built-in protections. This calculation is complicated by the mature, slowly declining market for traditional antivirus software despite Gen's efforts to expand into identity protection and privacy services.

Methodology

Gen Digital often shows attractive PEG ratios given low valuations, but this reflects market concerns about the long-term relevance of paid consumer antivirus software. The company's transition toward broader cyber safety services provides some growth offset. A low PEG may be a value trap unless Gen successfully pivots beyond legacy Norton antivirus toward identity and privacy products with sustainable competitive advantages.

Methodology

Gen Digital pays a meaningful dividend yielding significantly, reflecting the mature cash-generative nature of the subscription antivirus business. The company prioritizes returning cash to shareholders while slowly transitioning the product portfolio. PEGY is relevant for income investors seeking yield from consumer software, though dividend sustainability depends on slowing subscriber erosion and successful portfolio evolution.