How Much Cash Exactly Does Apple Plans To Return To Shareholders Over The Next 3 Years? This RBC Analyst Has The Answer

Although it’s clear that Apple Inc. AAPL will be returning massive amount of cash to shareholders, there is disagreement among analysts regarding the actual number. Amit Daryanani, RBC Capital Markets hardware analyst, feels the company can return anywhere between $150-200 billion in the next three years. He was on CNBC Thursday to discuss Apple’s next capital allocation program.

How Much Cash Will Apple Be Returning To Shareholders?

“Our assessment is if they continue this 3 year roadmap they have had in the past, they could return somewhere between $150 to $200 billion of cash back to shareholders,” Daryanani said. “I know it’s a big number, it actually equates to about 25p of the market cap back to invest over three years.”

He continued, “What’s interesting though it essentially approximates the amount of free cash what Apple is going to generate over the next three years. So, while these are big numbers, it also reflects the fact that Apple is generating a ton of cash and they already have a big pile of cash on the balance sheet.”

How Did You Estimated The $150-200 Billion Number?

“Let’s look at the way we sort of came up with that number there is, step one, Tim Cook made statements saying we must return excess cash back to shareholders,” Daryanani replied. “Well, if you look at Apple, they will generate conservatively I think $65-66 billion of free cash flow this year, they did $34 billion in Q1 by the way. So, assumed that they can do 75 to 100p of that back to shareholders, that’s how you get $55 to $60 billion annual commitment to buyback.”

What If They Are Working On New Project Like A Car And Want To Fund That Instead Of Returning Cash?

“Absolutely and I would imagine the $178 billion of cash they have on the balance sheet will fund all of that and more as you go forward,” Daryanani added.