The Motley Food: Viva Veeva!

Veeva Systems (NYSE: VEEV) is a leading global provider of cloud software solutions for life sciences companies – such as drugmakers, biotech companies and medical device makers. The company is steadily growing revenue, is extremely profitable and has a solid cash position.

Veeva’s software solutions allow customers to streamline research and development processes, commercialize approved products and even comply with government regulations. The Veeva Commercial Cloud offering helps companies connect with health care providers and manage sales and marketing for new products.

Veeva Systems makes most of its revenue from recurring subscriptions that companies pay to access its software solutions. In the company’s third quarter, subscription services were up 17% year over year and accounted for 83% of total revenue.

The company also generated profits of $186 million according to generally accepted accounting principles (GAAP), up a whopping 37% from a year ago. Veeva Systems ended the quarter with more than $1 billion in cash and cash equivalents on its balance sheet.

Veeva’s stock looks appealingly priced at recent levels, with a forward-looking price-to-earnings (P/E) ratio of 34, well below its five-year average of 48. Long-term investors might want to learn more about this promising company. (The Motley Fool owns shares of and recommends Veeva Systems.)

My smartest investment

My husband and I both worked for decades at a steel company that went out of business. Our pensions were cut by 40%. Luckily, the company had begun a 401(k) plan, and we had contributed a lot to it. When the company went belly-up, we contacted a financial adviser who recommended a mix of investments that has done quite well. We have taken only the required minimum distribution every year. If not for our IRAs and 401(k) plans, we would have been in terrible shape. Please continue to push people to invest. It’s vital.

By the way – I’m writing this from our balcony on a cruise ship, as we wait to sail to the Caribbean, so I guess we are doing OK. This is our 42nd cruise. – C.F., Bay Village, Ohio

The Fool responds: Your story is a great reminder that we shouldn’t take financial benefits such as pensions for granted. If a company hasn’t sufficiently allocated funds for its pension obligations, retirees may not get all that they were initially promised. It’s also smart to set up multiple income streams for retirement, as you did. For example, you might depend on Social Security, IRAs, 401(k)s and dividend income from stocks in a standard brokerage account. Perhaps look into fixed annuities and maybe even a reverse mortgage.

(Do you have a smart or regrettable investment move to share with us? Email it to TMFShare@fool.com.)

Ask the Fool

Q. How, exactly, do tariffs work? – P.N., Philadelphia

A. A tariff is a tax on an import – and it’s paid by importers, not foreign countries. As an example, the United States has recently had a 2.5% tariff on many imported passenger vehicles. So the American importer of a $20,000 vehicle would pay $500 – which would go to the U.S. Treasury and would likely end up factored into the price the car buyer pays.

Some steep tariffs have been proposed recently, such as a 60% surcharge on goods from China. That would generate a lot of income for the U.S. government, but would also likely result in much higher prices on products from China.

Used strategically, tariffs can help domestic businesses by increasing the cost of goods imported from foreign competitors, but critics note that they can also shrink economic output and lead to lower wages and higher inflation. Trade wars between countries, featuring escalating tariffs, can also be counterproductive.

Q. What does forbearance refer to, financially? – G.S., Opelika, Alabama

A. It’s a temporary pause on your payments toward a debt – perhaps a mortgage or student loan. If you owe money and you can’t meet your repayment obligations, a lender may offer forbearance, allowing you to pause some or all of your payments instead of considering you in default on your loan. That could mean the lender avoids foreclosing on your property, too.

If you’re a candidate for forbearance, contact your lender and apply, explaining your financial situation. The payments you miss are not forgiven – instead, they’re incorporated into what you owe, often via slightly bigger future payments or additional payments. You can learn more at StudentAid.gov by searching for “forbearance.”