SYMANTEC CORP. $24.10 - Nasdaq symbol SYMC

SYMANTEC CORP. $24.10 (Nasdaq symbol SYMC; TSINetwork Rating: Average)(650-527-8000; www.symantec.com; Shares outstanding: 680.7 million; Market cap: $16.1 billion; Dividend yield: 2.5%) continues to strengthen its fast-growing cybersecurity business while getting set to split off its Veritas Technologies division.

Corporations are spending more on cybersecurity following highprofile attacks on Sony, Home Depot and Target. Symantec is taking advantage of this trend by hiring more programmers. It has also cancelled unprofitable contracts and simplified its product lines.

These moves cut the company’s profits by 10.2% in its fiscal 2015 fourth quarter, which ended April 3, 2015, to $299 million, or $0.43 a share, from $333 million, or $0.48. Sales fell 6.2%, to $1.55 billion from $1.65 billion—though if you disregard the U.S. dollar’s negative impact on Symantec’s overseas sales, its revenue rose 1%.

The company spends a very high 19% of its sales on research; that’s keeping it at the forefront of new cybersecurity trends, including the need for mobile-device security, Internet traffic analysis and data protection in the cloud.

The Veritas business makes products for data backup and recovery and supplies 35% of Symantec’s revenue. These products don’t sell as quickly as cybersecurity systems, but companies are continuing to use more storage and data-analysis tools. That could make an independent Veritas an attractive takeover target. Symantec expects to hand out 100% of Veritas’ shares to its investors by the end of 2015.

The company now expects to earn $1.80 to $1.90 a share for all of fiscal 2016, and the stock trades at an attractive 13.0 times the midpoint of that range. It yields 2.5%.

Symantec is a buy.

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