“From September 1, 2004 to December 31, 2021, Google stock returned roughly 5730% versus the S&P 500 return of roughly 504% or about 11x better than the market.”
COMPANY PROFILE
Google is the undisputed leader in advertising and Internet search. And now they are rapidly creating consumer products that can benefit from that search dominance. From Phones, Tablets, Laptops, Voice Recognition Devices, and the Connected Home series with Nest, this dominant brands is not sitting still. Building great consumer products is not easy and takes time but Google has the brand recognition and the capital to drive strong innovation and marketing. The Google segment offers products, such as Ads, Android, Chrome, Google Cloud, Google Maps, Google Play, Hardware, Search, and YouTube, as well as technical infrastructure. This segment also offers digital content, cloud services, hardware devices, and other miscellaneous products and services.
Style Factor Benefits
From a factor scoring perspective versus the other 199 brands in the brands index, here’s where Google scores well as of 12/31/21:
84% high margin expansion
81% strong price momentum trends
80% high ROIC > WACC
86% low debt/EV
97% very low default risk
87% top 5 year ROIC growth
96% high total revenues
99% high total free cash flow generation
91% strong sales surprise last quarter
2/1/22 Update
“Our fourth quarter revenues of $75 billion, up 32% year over year, reflected broad-based strength in advertiser spend and strong consumer online activity, as well as substantial ongoing revenue growth from Google Cloud. Our investments have helped us drive this growth by delivering the services that people, our partners and businesses need, and we continue to invest in long-term opportunities.” This company just finds new ways to win and generate new revenues. 15% of search comes from the travel and leisure industry so that offers very strong opportunities as pent-up demand continues to be high. Google Cloud (includes GSuite): $22B run rate, growing 44% YoY (maintaining impressive growth from last quarter of 45%).
Also announced a 20x1 stock split, smoothing the way for more investors to get into the stock. I love this move, so many people stay away because they don’t want 5 shares of anything even though the percentage is the same. Just a perception thing.
12/31/21 Update
Google continues to be one of the most impressive brands in the world. Yes, theres a clear monopoly in search, but not because there aren’t competitors, but because they all stink compared to what google search offers. YouTube is a monster and the sum of the parts of this company would likely be worth even more than the current $1.9T market cap. The company generates massive cash flow, bought back about $12B in stock last quarter and has $65 billion in quarterly revenues. Is there any wonder why some of these great brands are valued at more than $1 trillion? In the monster we call, YouTube, advertising revenue went up from $7 billion last quarter to a record $7.2 billion this quarter, despite some fears that Apple’s iOS Ad Tracking Transparency would have hit the unit. If Google can figure out consumer products like Apple, look out above! With this amount of revenue, buybacks, cash flow generation and the strong balance sheet, I don’t worry at all about the stock and will just use all weakness as a new buying opportunity.
Google’s revenue in Q3 2021: $65.1 billion see a trend here?
2020: $46.2 billion
2019: $40.5 billion
2018: $33.7 billion
2017: $27.8 billion
2016: $22.5 billion
2015: $18.7 billion
2014: $16.5 billion
2013: $13.8 billion
2012: $13.3 billion
2011: $9.7 billion
2010: $7.3 billion
2009: $5.9 billion