What I like about The Walt Disney Company (NYSE:DIS) is its consistent share buybacks. Since the beginning of its fiscal year, the company has repurchased around 38 million shares for $2 billion. With the decent second quarter operating performance, I expected that Disney would kept repurchasing its shares for the next two fiscal quarters to return more cash to its shareholders.
Apple – a growth stock turned value
Apple Inc. (NASDAQ:AAPL), which topped of the world’s respected companies list last year, has dropped to the third position with the mean score of approximately 3.8. Apple has moved from the growth category to value category. It holds the second position, with a 17.3% market share in the world’s smartphone industry.
Even with slower growth than it used to experience, Apple Inc. (NASDAQ:AAPL) looks quite attractive from the quantitative perspective. Apple has been pressured by hedge fund manager David Einhorn to return its huge cash pile to investors to unlock shareholder value. Interestingly, Apple Inc. (NASDAQ:AAPL) has issued around $17 billion in bonds, making use of low-debt financing to return more cash to its shareholders. Even with the lower credit rating, Apple managed to issue bonds with a triple-A-rating equivalent interest rate in the range of 0.5% to 3.9%.
In the next two years, the company intends to return as much as $100 billion in cash to shareholders in both forms of dividend payment and share purchases.
What I like about Apple Inc. (NASDAQ:AAPL) is its low goodwill and intangible assets compared to other tech giants, accounting for only nearly 3% of the total assets. Indeed, with $145.5 billion in cash and total investments as of March, it could acquire Facebook Inc (NASDAQ:FB), Hewlett-Packard Company (NYSE:HPQ) and Yahoo! Inc. (NASDAQ:YHOO) combined. Apple is trading at $396.50 per share, with the total market cap of $372.2 billion. The market values Apple at only 6.1 times its trailing EBITDA.
My Foolish take
All of those three above-mentioned businesses could fit in investors’ long-term portfolios. Berkshire Hathaway Inc. (NYSE:BRK.A), under Buffett’s superior leadership and the growing performance of its operating businesses, could deliver much more business value in the long run. The Walt Disney Company (NYSE:DIS), with the superior brand in many operating fields, might also experience decent growth in the future. Investors might also consider Apple with a juicy dividend yield at 3%. Moreover, a potential $100 billion cash return represents a whopping 27% or so total yield to Apple Inc. (NASDAQ:AAPL)’s shareholders in the next two years.
The article The World’s 3 Most Respected Companies originally appeared on Fool.com and is written by Anh Hoang.
Anh HOANG owns shares of Apple. The Motley Fool recommends Apple and Walt Disney. The Motley Fool owns shares of Apple and Walt Disney. Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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