Apple Inc. (NASDAQ:AAPL)‘s announcements at the World Wide Developers Conference (WWDC) sparked interest. Phil Schiller tried to put critics to rest with his presentation of the Mac Pro on Monday. A promotional video played, Phil took the stage, looked at the image on the screens behind him and said, “Can’t innovate anymore, my ass.” But is Apple really being innovative?
Let’s look at Apple Inc. (NASDAQ:AAPL)’s Mac Pro first. Quite frankly, Apple is not innovative; Apple is dependent on other companies to create products for its use. Although it hasn’t been announced, the Mac Pro will likely use new products from Intel Corporation (NASDAQ:INTC).
Apple Inc. (NASDAQ:AAPL) will also use two Advanced Micro Devices, Inc. (NYSE:AMD) Firepro workstation graphics cards that can support three 4K displays by using internal graphics. Apple will likely receive credit for the innovation, despite other companies doing the work.
The graphics and processors aren’t really Apple’s to claim, but the design is. The design of the Mac Pro’s workstation is unlike anything else. The biggest thing for Apple in this case is that all of the expansion of this workstation is external.
Valuation
Regardless of whether or not a company is innovating new products for itself, it might offer a cheaper buy for investors. Apple beats out most companies in this area. Intel Corporation (NASDAQ:INTC)’s free cash flow (FCF) yield is a solid 8.1%, while Advanced Micro Devices, Inc. (NYSE:AMD) shows a negative twelve trailing months of FCF, and its FCF yield is -25%. Apple Inc. (NASDAQ:AAPL)’s is 10.8%.
Both Intel and Apple are far larger companies than AMD, as it only has a market cap of $2.8 billion. Intel’s market cap is is almost 44 times larger than AMD’s, but Apple trumps both of these companies with a market cap of almost $408 billion. Intel Corporation (NASDAQ:INTC)’s earnings yield is 8.2%, while Apple’s is 9.6%. Again, Apple Inc. (NASDAQ:AAPL) provides a cheaper valuation than either of its partners — Advanced Micro Devices, Inc. (NYSE:AMD)’s earnings yield is a dismal -25.1%.
AMD is much smaller, not as profitable, and excruciatingly expensive. It is definitely not the best deal for value or bargain investors, but it may offer better growth and performance than the others.
Performance
I don’t expect Apple Inc. (NASDAQ:AAPL)’s stock to move a lot, but I do expect shareholders to receive chunky dividends. I think Apple’s stock will remain between $400-$500 a share for a significant amount of time, but shareholders could receive an additional $100 billion by 2015. Apple is a cash cow. Now, with that said, let’s look at how these stocks have performed over time.
