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The Swift FCF Yield: Apple

|Includes: Apple Inc. (AAPL)

Apple, Inc. stock chart via FinViz

January 24, 2017 is the estimated Q1 2017 Earnings Release for Apple Inc. (NASDAQ: AAPL). Meanwhile the trailing statistics show that the company continues to generate bountiful cash reserves of $67,155m and a modest P/E of $13.28.

Trending is the Apple Watch and its new charger:

Steve Martin and Travis Brown: Twitter on Apple Watch

Heading into the holiday gifting season is part of the bullish thesis for a tech and social company that Apple, Inc. dually occupies. The Beats acquisition is still maximizing its synergy with iTunes and the fight for headphone branding. The new exclusive, Apple wireless signal that replaces traditional BlueTooth is an example of creating consumer dependency. Ultimately, something is brewing that may resemble the first launch of the iPod/MP3 players: complete market dominance.

Free Cash Flow (FCF) Yield

The FCF Yield for Apple at the end of fiscal year 2016 is 8.92% in relation to its Market Capitalization. The company created $65,824m in Operating Cash Flow with a minimal Capital Expenditure of ($13,548m). This tends to support speculation of random buyouts. Everyone would like for their small-cap company to be acquired by Apple, Inc., which has the cash to do so.

FCF Yield for Apple Inc. Fiscal 2016 by DIYSI

Free Cash Flow is tabulated by taking the value of the company's operating cash flow and subtracting from it the value of capital expenses. The yield is then formulated by dividing the result by either the market capital or enterprise value.

Revenue margins continue to be promising:

  • 27.80% Operating Margin
  • 21.20% Profit Margin

The dividend yield continues to be minimal and nothing to boast of at less than 2.25%.

Conclusion

The Swift FCF Yield objective is not to issue buy, sell or hold ratings, however after a quick review of Apple's stock the result is compelling. At this juncture the stock is a buy.

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The Swift FCF Yield and other stock analysis by Travis Brown can be viewed at Seeking Alpha. Click the follow button at the top of the page to receive alerts to the author's new work.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.