Should I Invest in Apple Inc. (AAPL)?

4. Price to earnings: a forward 9 or so compares well to growth and yield forecasts. 4/5

5. Outlook: satisfactory recent trading and a cautiously positive outlook. 4/5

Overall, I score Apple 23 out of 25, which encourages me to believe that, despite my reservations, the company has potential to outpace the wider market’s total return, going forward.

Foolish summary
With lots of net cash on the balance sheet and robust forecast dividend cover, Apple’s finances are in good shape. Historical growth has been robust, which presents a stiff comparator for future performance. The valuation looks reasonable compared to forecasts for profit growth and the outlook seems confident.

But how can we really know? If sales or profits start to slip, forecasts will be marked down at a stroke! When a company’s market share is so large, there must surely be plenty of downside risk however rosy the valuation looks. But I’m happy to put Apple on my watchlist, for now, pending a closer look when there’s evidence of a bottoming share price and stabilizing margins.

The article Should I Invest in Apple? originally appeared on Fool.com and is written by Kevin Godbold.

Kevin Godbold has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple.

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