The Case to Buy Google Inc (GOOG) in 10 Charts

In summary, Google’s core search business, Android OS, and new ventures are projected to grow earnings per share at a 15% clip over the next five years.

Reasonable valuation

All lot of investors get squeamish over the Google’s $800 price tag. With the stock trading at 14 times forward earnings, Google looks expensive compared to other large-cap technology stocks like Apple or Microsoft.

But when you account for the company’s growth and value the stock on a PEG basis, Google’s valuation is well in line with peers.

Foolish bottom line

Google has several catalysts that could drive the stock higher over the next year.

Google Store: According to a recent report in the Wall Street Journal, Google may be developing plans to launch retail stores in the United States. This would serve as an effective distribution platform for the company’s growing hardware product portfolio.

Dividend: Google is sitting on $48 billion in cash representing almost 20% of the company’s market capitalization. With mounting pressure from the Street to return some of that hoard to shareholders, the company could easily afford fund a big dividend payout or stock buyback.

Global Recovery: Growth is accelerating in China and the United States and the debt crisis in Europe shows some signs of stabilizing. A global recovery would provide a nice tailwind for advertisement spending.

The article The Case to Buy Google in 10 Charts originally appeared on and is written by Robert Baillieul.

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