10 Stocks Taking Care of Investors: No. 7 Oracle (ORCL)

June 11, 2009 4:20 PM EDT

These 10 stocks have been rewarding investors with share buybacks, strong dividends, sales/earnings and stock performance and are worthy cornerstones of any portfolio. You can track the entire series here.

Number 7: Oracle (Nasdaq: ORCL)

Oracle is the world's largest business software. The company develops, manufactures, markets, distributes and services database and middleware software as well as applications software designed to help customers manage and grow their business operations. Oracle is also the king of the acquisition. The company has successfully integrated dozens of acquisitions including some large deals like PeopleSoft in 2005, Siebel Systems in 2006, Hyperion in 2007, BEA Systems in 2008 and most recently Oracle agreed to acquire Sun Microsystem (Nasdaq: JAVA). Oracle was founded and is run by sometimes controversial billionaire Larry Ellison, the fourth richest person in the world.

Shares Buybacks: On October 20, 2008, Oracle approved the expansion of its repurchase program by $8.0 billion and as of February 28, 2009, approximately $6.5 billion was available for share repurchases. Oracle repurchased approximately 211.6 million shares for $3.7 billion during the nine months ended February 28, 2009.

Dividends: In March 2009, Oracle declared its first ever quarterly cash dividend of $0.05 a share. Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination of the Board of Directors. If Oracle were to maintain a $0.05 quarterly payout the dividend yield would equal about 1%. Oracle has completed a number of stock dividend, or stock splits.

Revenue/Profit: Oracle has grown its total revenues from $10.1 billion in 2004 to $22.43 billion in 2008. Net income in that time has grown from $2.68 billion to $5.52 billion. Diluted EPS in that time has grown from $0.50/share to $1.06/share. In its latest quarter, Oracle reported EPS of $0.35 per share, which was 3 cents better than the analyst estimate of $0.32. Revenues for the quarter were $5.5 billion, versus the consensus of $5.45 billion. The company is expected to earn $1.42/share this year and $1.49/share next year.

Stock Performance: Shares of ORCL have greatly outperformed the broader market. Shares of ORCL are up 19% YTD, versus a 5% move up in the S&P 500. Over the last year, ORCL has held up strongly losing only 4.5% versus a 29% slide in the S&P 500. Over a 5 year period, ORCL is up 80% versus a 17% slide in the S&P 500.

With billions in past share repurchases, a first time cash dividend payout, strong revenue and earnings growth, a knack for integrating mergers and market-beating stock performance, Oracle is "taking care of investors."

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