John Fattibene, Director of Financial Planning at Harvest Financial Partners, says Apple Inc. (AAPL) is a stock that exemplifies his firm’s investment philosophy of investing in high-quality companies that offer dividends.
“[Apple] is a stock that has over a 2% yield; it’s under 14 times forward earnings, and it has a ton of cash on its balance sheet. As of the latest quarter, they had net cash, cash minus debt, of over $130 billion or roughly $22 per share. If we adjust the p/e for that cash, we’re closer to 10 to 10.5 times forward earnings, an extraordinarily cheap multiple for stock that is still growing pretty well,” Fattibene said.
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Fattibene says Apple’s fastest growing segment right now is software and services, which has created a positive loop for people to continue buying the company’s hardware.
“They’ve created this wonderful ecosystem,” Fattibene said. “The fastest growing segment they have right now is software and services through their iTunes and App Stores. They generated over $13 billion in sales for the nine months that ended with their June quarter. At $13 billion, you have one of the largest software companies in the world, but that’s just part of Apple.”
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