5 Companies Apple Could Buy Outright

At this point, you're probably sick of hearing about Apple's (Nasdaq: AAPL  ) ridiculous cash hoard. We first started reporting about it last year when the iPhone and iPad maker's cash and investments were worth an estimated $82 billion. Well that number has now grown to nearly $100 billion -- $97.6 billion to be precise.

Source: Morningstar.com.

To put this in perspective, I thought it'd be fun to look at a handful of well-known companies that Apple's cash could buy outright. You may be surprised by the names.

Company

Market Capitalization

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Bank of America $84.5 billion Add
Amazon.com $81.4 billion Add
Disney $76.2 billion Add
Goldman Sachs $59.8 billion Add
Boeing $56.6 billion Add

Source: Yahoo! Finance.

If the company were so inclined, in fact, it could pay cash for any of 474, or 95%, of the companies listed on the S&P 500. And if it didn't want just one, then it could outright buy all 37 of the smallest companies on the index. With this in mind, perhaps the question I should have asked is: What couldn't Apple's cash buy?

All joking aside, however, if you're an Apple shareholder, then you may think it's about time to see some of that money returned by means of a dividend or share buyback. While you may not be that lucky, as Apple hasn't done either since 1995 and the late Steve Jobs was virulently opposed to doing both, it does seem that the company is on the verge of doing something with it. According to Bloomberg, at the company's annual meeting yesterday, CEO Tim Cook acknowledged that it has more than it needs. And he's purportedly tasked his board with determining just what to do with it.

Leave a comment below about what you think Apple should do with its nearly $100 billion cash hoard -- and giving it all to me doesn't count. While you're here, I invite you to check out one of the newest free reports by our analysts at The Motley Fool. It reveals the identity of an up-and-coming company that's positioned to be one of the market's next multibaggers. To access this report while it's still available, click here now -- it's free.

Fool contributor John Maxfield owns shares of Bank of America. The Motley Fool owns shares of Bank of America, Apple, and Amazon.com. Motley Fool newsletter services have recommended buying shares of Walt Disney, Amazon.com, Apple, and Goldman Sachs, as well as creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (16) | Recommend This Article (16)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 24, 2012, at 12:47 PM, GETRICHSLOW2 wrote:

    As soon as they offer a dividend of 2.5 or more, I will be a prospective buyer.

  • Report this Comment On February 24, 2012, at 2:54 PM, lucasmonger wrote:

    Bank of America, Boeing, and Goldman Sachs make no business sense at all for Apple to buy.

    Amazon however would be an interesting twist... Kindle Fire could be replaced by a smaller, cheaper iPad and Apple could start selling everything, not just hardware and digital downloads (apps, music, video, etc). Although an Apple-Amazon merger would cause all sorts of antitrust issues.

    Disney, however, is really interesting. If Apple got into the content business, pulled Disney from all other streaming providers, cable and satellite companies, and even just regular broadcast TV and made the iTunes ecosystem the only place to view Disney content, then you'd have something.

    LL

  • Report this Comment On February 24, 2012, at 3:16 PM, mikecart1 wrote:

    This article makes no sense and makes buying a company far too simplistic. A company does not blow their entire cash pile on a single company. A company does not buy another company on market cap alone. A company does not buy another company if it doesn't make themselves more valuable now or in the future. A company does not buy a company that doesn't expand their own products.

    Apple would never buy any of those companies. Those companies would never sell for those prices. The government would never allow this type of monopoly to form. This article makes no sense.

    ★★★

  • Report this Comment On February 24, 2012, at 3:18 PM, LoweFool wrote:

    Buy RIMM for 26B, improve and infuse the product line; have access to the 80million Blackberry subscribers who will become part of the iCloud network; steady monthly income to top off iEverything sales.

  • Report this Comment On February 24, 2012, at 3:24 PM, Risky88 wrote:

    Buy a cable company

    integrate it with iTV

    Especially DISH since they also are rebuilding blockbuster

    so many ideas.....

  • Report this Comment On February 24, 2012, at 5:34 PM, Turfscape wrote:

    ADOBE! End the Flash war for good...just buy out Adobe. Plus, Apple could leverage parts of Adobe Premiere to fill out the shortcomings of Final Cut Pro X.

    To me, it's a purchase that would actually make sense.

  • Report this Comment On February 24, 2012, at 5:38 PM, Turfscape wrote:

    mikecart1 wrote: "A company does not buy another company if it doesn't make themselves more valuable now or in the future."

    Please go tell the to Harley-Davidson circa 2008 when they bought MV Agusta. Ugh. Such a waste of cash, goodwill, and time.

    mikecart1 wrote: "The government would never allow this type of monopoly to form."

    Which of the companies discussed would create a monopoly? If Apple sought to buy or merge with Microsoft, I could see anti-trust regulators stepping in...but how would the purchase of Amazon or Disney or a bank constitute a monopoly?

  • Report this Comment On February 24, 2012, at 6:08 PM, sjnsvcs wrote:

    Some of you folks need to buy a sense of humor! The article starts out with; "To put this in perspective, I thought it'd be fun to look at a handful of companies that Apple could buy outright"

    The author didn't say that they should, he said they could.

    Step away from the computer, have a beer take off your pants and enjoy the weekend. Markets are now closed. Reinstall your tight panties on Monday morning.

  • Report this Comment On February 24, 2012, at 6:44 PM, McMichaelR wrote:

    One: make a special dividend: two: start a regular 3% annual dividend.Three: make some selected acqisitions that add to the product line.

    On another subject, consider a 10 for 1 stock split.

  • Report this Comment On February 24, 2012, at 9:51 PM, thevandman wrote:

    Buy Sirius XM!

  • Report this Comment On February 25, 2012, at 7:25 AM, rjbilimor wrote:

    i say they buy starbucks. apple and starbucks go together. device and use-location match nicely!

  • Report this Comment On February 26, 2012, at 12:28 AM, LatifK wrote:

    Mega mergers rarely make sense for either parties are notoriously difficult at such scales. They have to go after small to midsize companies that makes sense and adds synergies to their core business.

    To that end, it's really hard to see any of the large caps provide value or a competitive edge that would add to Apple's core business.

    Perhaps that is why it has so much cash at this point.

  • Report this Comment On February 26, 2012, at 12:43 AM, lowmaple wrote:

    They need cash to buy a company perhaps like the chinese ipad idiots (just to shut them up). But seriously, there will be a time when some real rule breaker contender will arise that will disrupt apple's plans`and apple must buy them.out.

  • Report this Comment On February 26, 2012, at 9:06 AM, Chemsoldier88 wrote:

    @ sjnsvcs

    You must made my day.

    And Mikecart1... he's right. Lighten up and read the second paragraph of the article instead of scrolling down to the pretty graphs and charts right away.

  • Report this Comment On February 26, 2012, at 9:09 PM, TurbulentToby wrote:

    Anyone ever notice how well Jobs fit George Orwell's description of Emmanuel Goldstein?

    For $100B, perhaps the ghost of Steve Jobs can finally afford to buy the CIA from Mr Obama?

    Perhaps this will be the final visionary piece of the laser-like puzzle Apple posed to us in the famous 1984 commercial http://www.youtube.com/watch?v=OYecfV3ubP8

    I'm just speculating of course... It's not that I think that sitting on $100B of shareholder cash for no sensible reason is a dubious breach of fiduciary duty... No, I don't think it would be politically appropriate to think something like that...

    I certainly wouldn't suggest that such fiduciary irresponsibility could only be justified by some posthumous megalomaniac conspiracy... No sir, not me. I'm just one of the apple-buying Jobs-fearin' cloud-speaking crowd. Pay no attention.

  • Report this Comment On February 27, 2012, at 10:34 AM, jpints wrote:

    start off with a one-time special dividend of $20. proceed to aim for around a 2.5% yield.

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