Brian Sozzi for Yahoo Finance:
Sorry GE, but Apple is the new widows and orphans stock.
Investors shouldn’t buy Apple’s stock because a 5G iPhone may arrive in 2021 or the new Apple TV+ will suck in a massive number of subscribers when it debuts this fall. Nope, buy Apple because it wants to give away all its cash to shareholders mostly through an earnings-boosting stock buyback plan, says one veteran tech analyst.
“We think that is part of the bull case on Apple,” CFRA analyst Angelo Zino said on Yahoo Finance’s The First Trade when asked if the tech giant’s financial engineering on buybacks is a good thing for investors. “What we love about the Apple story is that you have a great management team there and two, they are an absolute free cash flow machine.”
Vino added, “Yes, they are aggressively buying back shares — but if you think about it, all that cash they have generated over the last decade that has been sitting on the books is cash that belongs to the investor.”
[In fiscal Q319], The company returned over $21 billion to shareholders through a combination of buybacks ($17 billion) and dividends ($3.6 billion). For the nine months ended June 29, Apple has repurchased a colossal $49.5 billion of its stock.
MacDailyNews Take: It’s going to take a lot of buybacks and, to a lesser extent, dividends for Apple to get to their goal of being net cash neutral – and that’s great news for AAPL shareholders!