APPLE INC (NASDAQ:AAPL) – A Quality Stock Worth Considering

APPLE INC (NASDAQ:AAPL) stands out as a strong candidate for quality investors, according to our Caviar Cruise stock screener. The company demonstrates consistent growth, high profitability, and financial health, making it a compelling choice for long-term investors. Below, we examine why AAPL meets the criteria for quality investing.

Key Strengths of AAPL

• Strong Revenue & EBIT Growth: Over the past five years, AAPL has delivered revenue growth of 6.2% annually, while EBIT growth has been even stronger at 14.0%, indicating improving profitability.
• High Return on Invested Capital (ROIC): With an ROIC (excluding cash and goodwill) of 74.9%, AAPL generates exceptional returns on its investments, far exceeding the 15% threshold for quality stocks.
• Low Debt Burden: The company’s debt-to-free cash flow ratio is just 1.0, meaning it could repay all its debt in about a year using current cash flows.
• High Profit Quality: AAPL converts net income into free cash flow efficiently, with a five-year average profit quality of 111.3%, well above the 75% benchmark.

Fundamental Analysis Summary

Our fundamental report assigns AAPL a rating of 7 out of 10, highlighting its strengths in profitability and financial health. Key takeaways include:

• Profitability: Exceptional margins, with an operating margin of 31.8% and a net margin of 24.3%, both ranking near the top of its industry.
• Financial Health: Despite a high debt-to-equity ratio, AAPL’s strong cash flow and low debt-to-FCF ratio suggest manageable leverage.
• Valuation: The stock trades at a premium, with a P/E ratio of 30.0, but this may be justified by its strong fundamentals and growth prospects.

For investors seeking quality stocks with durable competitive advantages, AAPL remains a top contender.

Our Caviar Cruise screener lists more quality stocks and is updated daily. For a deeper dive, review the full fundamental analysis of AAPL.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.