The Fabulous Apple Cash Machine

Apple has enough cash for an outright purchase of General Electric or Wells Fargo or AT&T, the data shows. There is speculation that Apple will make a major acquisition: Companies like Netflix, Disney, Hulu and Tesla are on analysts’ lists.

But there is little sign right now that Apple intends to dispose of its money that way, in a gigantic acquisition. Instead, the company announced on Tuesday that it would expand its program of returning cash to shareholders in the form of dividends and stock buybacks. The numbers here, too, are so immense that they are hard to grasp.

In a conference call with stock analysts, Luca Maestri, Apple’s chief financial officer, said that since 2012, Apple’s buybacks and dividends amounted to $211.2 billion: The buybacks alone total $151 billion. Without those buybacks, which reduce Apple’s shares and total value, Apple’s market cap might already be as high as $900 billion (though without the buybacks, Apple’s stock price would be lower, so such calculations are inherently imprecise).

Furthermore, in the next two years, Mr. Maestri said, the company intends “to return $89 billion to our investors, which represents about 12 percent of our market cap at the current stock price.”

All of which is to say that if Apple’s cash machine keeps clicking, it could well become the first company with a $1 trillion market cap. But it would probably get there much faster if it were not sending so much cash back to investors.

The fact that it is doing so is great for shareholders, Mr. Damodaran said. It is displaying commendable discipline, he said, because Apple has had no better use for the money, either internally or with a big acquisition of a less-profitable or money-losing company.

Apple is already investing as much as it can in useful research and development, the company said on Tuesday. “We know how much we need to invest in the business,” Mr. Maestri said in the conference call. “We will never underinvest in the business. We’re in a very fortunate position that we generate cash beyond the needs that we have.”

It stashes nearly $240 billion of its cash offshore, out of reach of the Internal Revenue Service. Much of it will presumably return to the United States if the Trump administration lowers corporate tax rates, as it has proposed. Mr. Maestri said the company’s current plans for its cash reflect “the current tax legislation in this country, and there’s a lot that still needs to happen there, and we’ll see. Obviously, we will reassess our situation if things change.”

Toni Sacconaghi, an analyst with Bernstein Research, said a favorable tax deal could add another $9 or so to Apple’s shares, which are now trading at about $149. The expected redesign of the iPhone should also help the stock in the next several months, he said, because “we’ve found that Apple’s share price rises in the three to six months before the new phone comes out.” Apple stock is in that sweet spot now, he said.

Like Mr. Damodaran, however, he remains skeptical about Apple’s longer-term growth prospects. “The company is so big that it takes a lot to move the needle for growth,” he said. Apple’s global base of iPhone users is growing ever larger, which implies rising income from music and apps and headphones and the like, and it’s even possible that the company will come up with a new Big Thing in technology. Even if it does not, he said, the share price is still attractive.

Mr. Damodaran takes a more gimlet-eyed view. Back in February, when Apple shares were still trading at $130, he calculated Apple’s value based on metrics like cash flow and declared that the company was “fully deserving of its market value.” But when the stock price reached $140, he sold his own shares. “It’s still a great company,” he said in an interview. “But I don’t like the price.”

It isn’t a crazy price, not if you expect that Apple will remain disciplined and highly profitable and, maybe, even have another growth spurt next year. But unless the old Apple magic returns, the company right now is not a bargain.

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