Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

It’s Time to Buy Xerox Corporation (XRX) Stock. Here’s Why.

Xerox stock pays you best
Perhaps most important to investors, though, is the simple fact that out of the three big IT companies discussed here, Xerox Corporation (NYSE:XRX) is the one generating the most cash from its business — and it gives you the biggest free cash flow bang for your buck.

Measured by dividing a company’s market capitalization (the price you pay for Xerox stock) into its free cash flow (the money your investment generates for you), Xerox offers investors easily the best “free cash flow yield” of the three companies named. Put even more simply, for every $1 you invest in a share of Xerox Corporation (NYSE:XRX) stock today, you can expect the company to generate nearly 17.4 cents worth of real, cash profits on your investment.

It's Time to Buy Xerox Corporation (XRX) Stock. Here's Why.

XRX Free Cash Flow Yield data by YCharts

Xerox may ultimately use this cash to pay you bigger dividends (although its 2.6% dividend is already pretty big), to buy back shares (increasing the size of your stake in the company for every share it takes off the table), or to reinvest in its business and maintain its lead over rivals for years to come. Any way you look at it, though, Xerox Corporation (NYSE:XRX)’s ability to generate cash offers investors a great reason to invest.

And that, Fools, is the reason I think now’s a great time to buy Xerox stock.

The article It’s Time to Buy Xerox Stock. Here’s Why. originally appeared on Fool.com.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Accenture and owns shares of IBM.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.