Apple Inc. (AAPL)’s Stock Will Give You More Value After This Move

In contrast, Samsung has been committing more money on R&D activities. In 2012, Samsung spent nearly $9.36 billion for R&D. As Samsung generated more than $129 billion in 2012 revenue, its R&D spending represented as much as 7.25% of its total revenue. Samsung is still the global leading player in the smartphone industry. According to IDC, in the first quarter 2013, Samsung shipped 70.1 million smartphones, accounting for 32.7% of the total global smartphone market, while Apple ranked second with only 17.3% market share.

Samsung also has a strong balance sheet. As of December 2012, it had $96.78 billion in equity, $15.47 billion in cash, and only around $2.77 billion in long-term debt. Samsung has the cheapest valuation at around 3.45 times EV/EBITDA.

Microsoft is trading at $33 per share with a total market cap of more than $278 billion. The market values Microsoft at 6.77 times EV/EBITDA and its dividend yield is a bit higher at 2.9%. Apple Inc. (NASDAQ:AAPL) has the cheapest valuation at only 6.14 times EV/EBITDA. At the current trading price, Apple offers shareholders a dividend yield similar to Microsoft.

My Foolish take

Personally, I like Apple with its huge cash hoard, low valuation, and decent dividend. Moreover, the upcoming $60 billion buyback will create an additional yield of more than 14% for shareholders in the next two years. I also like Samsung due to its global market leading position in the smartphone market, low valuation, and high commitment to R&D activity. Microsoft, with consistent cash flow and a decent dividend yield, could be also a good pick for income shareholders.

The article Apple Will Return More Value After Debt Financing originally appeared on Fool.com and is written by Anh Hoang.

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