$50 Billion Is Big, but Not Big Enough

Apple  (NASDAQ: AAPL  ) is cash rich. In fact, cash accounts for 40% of the company's share price. Though Microsoft (NASDAQ: MSFT  ) comes close, with cash accounting for about 30% of its share price, Apple looks dirt cheap compared to Intel (NASDAQ: INTC  ) , Google (NASDAQ: GOOGL  ) , and Amazon (NASDAQ: AMZN  ) when measured by cash per share.

Apple attempted to solve this problem with a boost to its dividend and share repurchase program. But is the world's largest share repurchase program large enough for Apple? If Apple continues to generate cash at today's levels, after its $100 billion program to return cash to shareholders through dividends and repurchases expires, the company could still have the same $144.7 billion it has today. Does this mean Apple should pay out even more cash? In the video below, Fool contributor Daniel Sparks shares his take on the matter.

There's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.


Read/Post Comments (5) | Recommend This Article (4)

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 April 26, 2013, at 8:29 PM, lakawak wrote:

    Apple is NOT going to continue generating cash at the rate it has been in the last year or so. That much is obvious

  • Report this Comment On April 26, 2013, at 8:56 PM, TMFDanielSparks wrote:

    lakawak,

    Free cash flow was up 9% in the 3rd quarter compared to the year-ago quarter. Even if margins contract, analysts still expect significant revenue growth by 2015. Even if Apple loses market share, the smartphone and tablet market are growing fast enough to offset these declines.

    It's very likely Apple will continue to generate the same levels of cash.

  • Report this Comment On April 26, 2013, at 10:31 PM, tkell31 wrote:

    Even if Apple loses market share? Even if margins contract? I'm confused, those are givens right now, no?

    EPS is going to contract this year so if you feel free cash flow will grow maybe you should outline your premise.

  • Report this Comment On April 27, 2013, at 12:02 AM, TMFDanielSparks wrote:

    tkell31,

    EPS is projected to decrease this year, but over the next five years its expected to grow by 20% per annum, according to the average analyst estimate. See Yahoo Finance page here: http://finance.yahoo.com/q/ae?s=AAPL+Analyst+Estimates

    The growing smartphone market and tablet market, plus new categories wil, over time, aid Apple in resuming positive comps.

  • Report this Comment On April 27, 2013, at 11:14 AM, techy46 wrote:

    No way and if Apple borrows at 2% and eliminates 3% dividend in $50 billion it's like printng money - QE AAPL?

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