Some investors consider VeriSign to be a high-moat company. However, its business model generates cash at a significant level. VeriSign is a leading provider of domain name registry services. VeriSign is the exclusive domain name registry for .com and .net domains. It provides other internet infrastructure services as well. Think about all the .com domains in the world. VeriSign played some part in making them run the way they do. All of this means that VeriSign is positioned favourably to earn regular and large amounts of cash. It is the reason why the company is discussed when one talks about 2021 software stocks to buy. VeriSign is based in Reston, Virginia. It is not based in Silicon Valley, as some people may have guessed. Regardless, the exclusive rights that the company has made it a valuable business.
VeriSign And DNS
DNS stands for domain name system. It is an essential building block that allows navigation from names to resources. DNS has been in existence since 1983. Every device or app that wants to interact with the online world has to use the DNS system. With advancements in technology over the years, the DNS system has improved. Privacy and security are also of high importance to internet users. Therefore, DNS encryption was introduced. Two technologies called authenticated resolution and adaptive resolution further enhance the safety and security of DNS nameservers. VeriSign is at the centre of developing such technologies.
Adaptive resolution acts as a new way to navigate the process of getting a web address to reach its content. VeriSign is not only a moat business that enjoys exclusivity in an important area of the internet. It also emphasizes research and development. Therefore, it is among the 2021 best software stocks.
VeriSign’s stock was trading around $214 on 27th September 2021. The stock was almost flat on a 1-month basis. Its 5-year returns were 174%. However, the stock has been range-bound since the middle of 2019.