“Make no mistake, the smartphone market is massive,” Chad Henage writes for The Motley Fool. “I found that IDC research expects 918 million smartphones to be sold worldwide in 2013. As of that research, Apple had the 2nd highest global market share at about 14.9%. If IDC is correct, and Apple only maintained its current market share, the company would sell 136 million iPhones this year, or about 34 million a quarter. The fact that the company just sold 37 million shows they may do better than this average.”
“The second reason investors should consider Apple’s stock is the company’s dividend increase may attract some yield hunters… Investors who wished Apple would pay a better dividend so they could invest are getting exactly what they want,” Henage writes. “The third positive is, the significance of Apple’s share repurchase plan. The company expects to repurchase as much as $60 billion in stock over the next two years. At current prices, and assuming the company splits this into $30 billion per year, the company would retire about 8% of their diluted shares each year. If you think about it, this means even if Apple showed just a 10% increase in net income, their EPS would rise by 18%.”
Henage writes, “Fourth, until the company uses a truckload of their cash, the stock actually has a higher percentage of net cash to market cap. than most of their competition. In fact, with $144.69 billion in net cash and investments and a roughly $383 billion market cap., 37.70% of Apple’s value is cash on the balance sheet… The bottom line is, even if Apple’s growth was cut in half, between the higher dividend, and significant share repurchases, shareholders should be well rewarded. Once the company takes the wraps off, ‘some amazing new hardware, software, and services’ that CEO Tim Cook referred to, today’s price will seem like a steal… From now until around June, investors may have a chance to buy Apple at these prices. After that, don’t expect to see these prices again.”
Much more in the full article here.