I have chosen Google because the company enjoys a unique position in its industry that very few companies in any industry can lay claims to. The name ‘Google’ has become synonymous with web search and its dominant position has not faced a serious challenge in over a decade despite the best efforts of competitors such as Microsoft and Yahoo. In highly volatile technology sector, Google’s brand power is a huge asset. I have also chosen Google due to its continuous impressive performance despite significantly growing in size over the last decade. Last but not least, I admire Google’s dedication to innovation and flexibility.

Google seems to have bright prospects if the opinions of stock analysts are to be believed. Out of the 47 polled investment analysts, not a single one made a recommendation to sell Google stock. 31 out of 47 or about two-third of the analysts recommended buying Google stock and even the least optimistic analysts recommended to hold onto the stock (CNN Money). The consensus among analysts could be interpreted as a huge applause for the company that has not let its huge size negatively affect its performance and future prospects. It was a real challenge finding an opinion piece that expressed a pessimistic view of Google but the author in an article on Tech Investing Daily does raise a good argument to avoid Google.

Jason Stutman adopts famed investors Warren Buffet reasoning in his argument that it is very difficult to predict the long-term future of technology companies due to the highly volatile nature of the industry. At the same time, there are also not reliable valuable methods to take into account the business models of technology companies. After all, who could have predicted the rise of Google and Apple ten years ago (Stutman, 2014).

Investment in Google carries lower risk investment as compared to other stocks as a whole. Technology companies tend to be high-risk investments and this applies to Google, too but Google’s individual characteristics more than make up for the highly volatile nature of computing and internet technology companies. First of all, Google’s dominant position in search engine has been difficult to break for the competition. Second, Google has quite a diverse product line which includes YouTube, Android, and Chrome web browser, in addition to the signature search engine technology. Google also has a strong performance track record. Google’s net income significantly grew from approximately $8.5 billion in the fiscal year 2010 to approximately $13.9 billion in the fiscal year 2014. Google also enjoys strong liquidity position as evident by its cash and cash equivalent of approximately $18.3 billion in 2014 (Morningstar). Google’s company beta is 1.03 which means it is relatively stable in terms of stock price movement dspite being a technology company.

Google is not only one of the largest companies in its own industry but in the world. The company currently has a market cap of a little over $450.48 billion while the industry average is merely approximately $277.5 million (Yahoo! Finance). As companies grow larger in size, it becomes challenging to maintain high growth rates. Thus, Google deserves praise as it continues to post strong growth rates. Google’s revenue more than doubled in just four years from approximately $29.3 billion in 2010 to approximately $66 billion in 2014 (Morningstar). As already noted, the company’s profitability continues to be impressive and most analysts are quite optimistic about Google’s future prospects.

Like many technology companies, Google’s stock is listed on NASDAQ and its ticker symbol is GOOG (NASDAQ). Google’s price-to-earnings ratio is 30.96 (Yahoo! Finance) which means investors are willing to pay $30.96 for each dollar earning of Google. In contrast, Google’s competitor Facebook has a price-to-earnings ratio of 95.96 (Yahoo! Finance) which means investors are willing to pay more for Facebook stock than Google for each dollar earning. But it also means Google’s stock is a relative bargain as compared to Facebook. As far as dividends are concerned, Google has never paid a dividend (NASDAQ) which may be due to the fact that the company’s management believes it can do a better job of reinvesting earnings than the shareholders. In addition, it also wants to accumulate funds to quickly act upon any opportunities that may arise.

Google’s future does seem to be promising because the company continues to post impressive financial performance as evident from its multi-billion dollar profits year after year. In addition, Google also has shown an amazing ability to adapt. Despite still being in a strong position, it recently restructured itself to become a holding company under which Alphabet is the parent company and brands like Google and YouTube etc. are subsidiaries. This new structure has been praised by observers as it would lead to greater operating efficiency and transparency within the company (MorningStar). I am also impressed by the fact that the company has adopted a renewed focus on containing costs (Barr, 2015) which should further improve profitability in the future.

I would definitely recommend investment in Google stock. The company’s P/E is still attractive for potential investors as compared to rivals like Facebook. Google’s new business model will allow it to continue to perform well despite significantly growing in size and hopefully not become another Microsoft. Even analysts who follow Google are optimistic about its prospects and such analysts often have information about company that ordinary investors may not have. Analysts could be wrong but such a strong consensus among them regarding company’s future does give me confidence Google will continue to do well in the near future.