Alphabet, the parent company of Google, has shown remarkable performance in the stock market over the past five years, outperforming the Nasdaq Composite Index. Investing in strong businesses and holding onto them can lead to significant returns, and Alphabet continues to be a smart stock choice based on its current valuation.
As of the latest data, Alphabet’s market capitalization stands at $1.978 billion, with a slight decrease in its stock price by 1.97% to $156.00. Despite this minor dip, Alphabet remains a standout performer in the market, with its shares offering substantial returns to long-term investors.
When considering the total return on investment, including dividends, the Nasdaq Composite Index has provided a 103% return over the past five years. However, Alphabet has surpassed this benchmark with a remarkable 151% return. This demonstrates the company’s strong growth and profitability, reflected in its consistent increase in revenue and earnings per share.
Alphabet’s success story highlights the principle that investing in fundamentally strong businesses can lead to significant gains for investors. The company’s revenue and diluted earnings per share have shown impressive compound annual growth rates of 17.6% and 21.6%, respectively, between 2018 and 2023.
Looking at the current market scenario, Alphabet’s stock continues to hold promise for investors. Despite its impressive performance in the past, the stock is trading at a reasonable forward price-to-earnings (P/E) ratio of 22.8, indicating potential for further growth. This valuation places Alphabet ahead of its peers in terms of valuation multiples, making it an attractive investment option.
Alphabet’s position as a dominant player in the digital landscape, with a massive market cap of $1.9 trillion and substantial annual sales, provides a strong foundation for future growth. The company’s consistent performance and strategic positioning in the market make it a compelling choice for investors looking for long-term growth opportunities.
