NPAT 4.2 to 4.8 cps approx, in a GFC. SP has to quickly move to...

NPAT 4.2 to 4.8 cps approx, in a GFC. SP has to quickly move to at least 10x to 12x you would think.

Then VOIP appears to be finally becoming a market reality (as the pipes to carry it are being laid out), with investments in upgrading bandwidth in a lot of countries (Well Aus gov at $44b AUD and the US gov at $10b US, Finland, UK 1.5b GBP, Germany, NZ $1.5b NZD that I know of as stimulus package related investments). I'm sure there are more.

Then we see that they are quite a scalable business (as IT product), with the ability to pay out as dividends about 80% or so of their NPAT. They also appear to be partnering all of the right players, and some analysts have said that their product is the best of its kind (then again I am only aware of that through IRI marketing). I do think that the servers have become commoditised, so the software and consulting is where the money is.

On the downside, their growth in dividends has been strong, but earnings have been static for about ten years (other than the blip in 2003 - when I picked up my stock). Also the dividends are not franked. Also it is hard to keep on top of the industry competition (in server related software) without being an insider. There are risks of the software functionality being copied, and the risk of staff walking out the door. Some of any uplift in profit will quite reasonably be claimed as higher wages or bonuses by key people.

So maybe PE of 14x (SP at about 60 cents) is conservative at present, with the profits finally showing IRI is getting traction. I think they should end up at a higher plateau of earnings. If they bought back their shares instead of paying out dividends, I would go to 15x.