Hewlett-Packard Company (HPQ), Dell Inc. (DELL), And How Research & Development Is Crucial to Think About

Samsung is now the global leader in smartphones. According to IDC, in the fourth quarter of 2012, Samsung shipped around 63.7 million units of smartphones, a significant growth of 76% compared to the first quarter of last year when it shipped around 36.2 million units.

Samsung currently commands around 29% of the total global smartphone market. Apple Inc. (NASDAQ:AAPL) ranks second with only 47.8 million unit shipments, accounting for 21.8% of the total global market. For the whole year 2012, Samsung shipped around 215.8 million units, a much higher amount than Apple’s shipment of 136.8 million units.

Samsung is trading around $1,300 per share, with a total market cap of $170.10 billion. The market values Samsung quite cheaply at only 4 times EV/EBITDA. Interestingly, the valuation of Samsung is only a bit higher than that of Hewlett-Packard Company (NYSE:HPQ). At $20 per share, Hewlett-Packard is worth around $38.6 billion. It is valued at nearly 3.8 times EV/EBITDA. Dell Inc. (NASDAQ:DELL) is the most expensive of the trio. At $13.30 per share, Dell is worth $23.2 billion on the market. The market values Dell at 4.67 times EV/EBITDA.

My Foolish take

Indeed, with the leading global market position and the low valuation, Samsung deserves a position in the portfolio of technology investors. As both Hewlett-Packard and Dell Inc. (NASDAQ:DELL) have been growing via acquisitions and they are both big players in the weakening overall global PC industry, investors should not buy them based on their fundamentals.

The article R&D Investment Is Important to Consider Before Investing in Technology originally appeared on Fool.com and is written by Anh Hoang.

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