Cash-Rich Stocks to Buy Now: Apple (AAPL)
Apple (AAPL) is, of course, the king of the cash kings. Apple’s $158 billion in net cash and investments is extraordinary, and that translates to $178 per share in cash, giving AAPL an effective price of $435.
And I still consider Apple stock to be undervalued, as long term growth estimates are for 21% EPS growth while the company only trades at 11 times next year’s earnings.
Everyone likes to speculate what Apple will do with its cash, though we at least know that AAPL has been ramping up the buybacks.
I don’t have any particularly special insight, but considering how rarely Apple buys out other companies — and how small those acquisitions are compared to the likes of Google (GOOG) and Facebook (FB) buyouts — I expect what cash Apple does spend will at least go back to shareholders.
I personally think it would be interesting (and very doable) to double the dividend to $24 per share of Apple stock annually. That comes out to about $22.6 billion in cash payouts every year, which is no problem considering AAPL generates $40 billion in free cash flow.
Apple stock with a 4.6% yield? At that point, AAPL would land on anyone’s list of stocks to buy.