(Source: Amdocs)

The investment thesis for Amdocs (DOX) is simple: the company is one of the most stable and shareholder-friendly businesses I have come across and can currently be bought at a reasonable share price. The company has been throwing off ample free cash flow since the early 2000s, consistently grows revenue by 3-7% a year, and returns 100% of its free cash flow to shareholders in the form of dividends and share buybacks. DOX has flourished in both good and bad economies; the company has generated no less than $326 million in annual free cash flow over the last 12 years and is averaging $500 million annually over the last five years. DOX throws off cash, returns it all to shareholders, and is trading at a trailing P/E ratio of 15. The lack of revenue growth suggests the current share price is fair, but I will be eagerly looking

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