Is the Dicker Data Ltd (ASX: DDR) share price a buy after a new division was announced.

Dicker Data is Australia’s largest and oldest distributor of information technology products, it has been operating for over 40 years having started in 1978. It was listed on the ASX in 2011. Some of the brands that it sells include HP, Cisco, Microsoft, Lenovo, Symantec, RSA, Toshiba, Samsung, ASUS and so on. Dicker Data has over 5,000 reseller customers.

Dicker Data’s New Division

Dicker Data is launching a division called Dicker Data Financial Services (DDFS) which is being established to address the shift in IT procurement to ‘as a service’.

Specifically, Dicker Data said that there is growing demand for device as a service (DaaS) solutions and infrastructure as a service (IaaS) solutions.

The IT company also said there is a demand for a shift from large capital expenditure to operational expenditure.

Dicker Data is going to operate this new division by offering customers monthly payment solutions that can be tailored to suit its reseller partners and their customers’ varying needs.

Dicker Data partners will be able to choose whether DDFS finances them directly or their end-users via introduction, subject to credit approval.

This offering will be unique compared to other credit providers because it will be underpinned by Dicker Data’s own balance sheet. Dicker Data will be ‘investing’ in every deal with transparency and an alignment of goals.

Dicker Data Chairman and CEO David Dicker said: “I’m pleased to bring this unique financing solution to market for our reseller partners. Our success has always been driven by leveraging our in-house expertise and by providing highly differentiated solutions.”

Does This Make Dicker Data A Buy?

I think this is a smart move by Dicker Data and it makes sense. Think of how car dealerships also provide finance, but it’s more likely to get the sale across the line.

The company has been steadily growing profit and it also has an impressive fully franked dividend yield of 4.1%.

However, hopefully it isn’t a sign that the customers need this type of financing as opposed to just being a bonus.

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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.