Tech stocks have been leading the recent rally, but not all of them have come along for the ride. While many of the old tech stocks have done well lately, they seem to be forgotten about by investors. But are they still tech stocks to buy?
Many of these stocks bring attractive qualities to the table. In some cases, it’s a nice dividend yield or low valuation. In other cases, the stocks offer surprisingly attractive growth rates. You’d be surprised by how many high-quality firms are still out there generating strong growth in the tech sector.
While all eyes seem to be on artificial intelligence and electric vehicles, there are many companies out there still churning out strong results from their legacy businesses. Let’s have a look at these three companies and fish for some tech stocks to buy.
PayPal (PYPL)
Investors may not consider PayPal (NASDAQ:PYPL) to be an “old tech” name, but it’s a high-quality company that’s been around for quite some time. Now almost 25 years old, the company has played an integral part in online and digital payments.
At the present time, though, the stock seems lost.
PayPal was a growth stock, but currently its growth rates have decreased considerably. But does that make it a value stock? I’m unsure of the answer, yet I am perplexed on how to classify this one. Analysts expect about 7% revenue growth this year and almost 10% growth in 2024. As for earnings, estimates call for 18% and 15% growth in 2023 and next year, respectively.
Despite all this, shares trade at just 15 times this year’s forecasted earnings. That’s darn cheap for solid earnings growth.
The company delivered solid earnings and better-than-expected guidance but hasn’t been rewarded. When it will be, I don’t know. But if it keeps growing like this, the stock will eventually go higher.
Oracle (ORCL)
Oracle (NYSE:ORCL) stock seems to fly under the radar, but is performing well. The stock is up 15% so far on the year and recently hit a 52-week high. Further, shares are currently down less than 10% from the all-time high.
How many tech stocks are within 10% of their highs? Not many, I can tell you that.
Analysts expect over 17% revenue growth this year, but just 3% earnings growth. In 2024, estimates call for 7.5% revenue growth and almost 11% earnings growth. While the outlook is admittedly a little mixed — for instance, it would be nice to see stronger earnings growth this year — it’s not necessarily bad. Plus, shares trade at about 18 times this year’s earnings.
The stock pays out a 1.7% dividend yield to boot. It’s not the largest yield in the world, but it at least gives investors a little something for the buy-and-hold crowd.
ASML Holding (ASML)
Not many people talk about ASML Holding (NASDAQ:ASML). This Netherland-based company sports a $267 billion market capitalization. From the company:
“We’re moving technology forward. In fact, we’re probably a part of the electronic device you’re using right now. Our lithography technology is fundamental to mass producing semiconductor chips. With it, the world’s top chipmakers are creating microchips that are more powerful, faster and energy efficient.”
Founded almost 40 years ago, the company is still chugging along quite nicely. Analysts expect almost 30% revenue growth this year and 10% growth next year. On the earnings front, it’s even more impressive. Consensus expectations call for 35% growth in 2023 and 21% growth in 2024.
Admittedly, this one is a bit more expensive, trading at just over 30 times this year’s earnings. However, given the expected growth rates, it’s not surprising.
On the date of publication, Bret Kenwell held a long position in PYPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.