Apple Inc. is Investors’ Most Respected Company

By @AringoYenko on
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TracBeam sues Apple. REUTERS

Apple Inc. reclaims its number one spot in Barron's list of The World's Most Respected Companies.

According to Barron's, the company fell off to number three in 2013 after dominating the list for five consecutive years. The descent was due to the company losing its value in a seven-month span that ended in the spring of 2013. There had also concerns that Apple is losing to Samsung Electronics and that CEO Tim Cook could not fill in the shoe of the late Steve Jobs.

However, the stock had since reverted and gained more than 60 per cent, to a split-adjusted $90, Barron's said. And, in just a matter of one year, Cook was able to step up.

Apple tops this year's list with an impressive score of 3.94, a "wide margin of victory", according to Barron's.

For this year's survey, Barron's sought the help of Beta Research in Syosset, N.Y. to survey 101 investors.

The investors participating in the survey were asked to rank their view of each of the company according to the following ratings: Highly Respect, Respect, Respect Somewhat, or Don't Respect.

Apple acquired the investors' high opinions for its recent acquisition of   Beats Electronics and upcoming launch of the iWatch, a new TV set-top box and a larger-screen iPhone model.

Barron's noted that even those investors who did not own Apple's stock gave Apple a "Highly Respect" rating.

"I love the products. I have an iPad that has revolutionized my life," Fla Lewis, a principal at Weybosset Research & Management in Providence, R.I. said.

Investors were also impressed of Apple's recent decision to a dividend hike, stock buybacks, and the 7-for-1 stock split that was all announced in April.

Apple's Board has increased its share buyback to $90 billion from the $60 billion in 2013 and is targeting to use $1 billion to net-share-settle vesting restricted stock units yearly, Apple said in a statement. It also increased its quarterly dividend of approximately 8 percent and has declared a dividend of $3.29 per common share, paid May 15, 2014 to shareholders of record as of the close of business on May 12, 2014 - and is planning to increase dividends yearly. The seven-for-one stock split entailed investors to receive six additional shares for every share held at the close of business on June 2, 2014.

"With annual payments of $11 billion, Apple is among the largest dividend payers in the world," the company claims in a statement. 

Out of the 101 investors surveyed by Barron's, 24 per cent believes that strong management makes a company respectable, 22 per cent believes in ethical business practices, 17 per cent in sound business strategy, 16 per cent in competitive edge  and 7 per cent in product innovation.

Participant Craig Giventer of Financial Partners Capital Management in New York believes a company should be a good steward of shareholder capital, thinks strategically, and acts ethically.

Participant Ina Fernandez, a managing director at Liberty Capital Management in Birmingham, Mich, noted that while no one can replace Jobs,  Cook is managing " a much larger enterprise than Jobs did and its complexity suits his skills."

Participant Jack Oliver, a money manager at RBO in St. Helena, Calif., sees Cook as a  long-term thinker, Cook's  decision to buy back stock and increase the dividend, even while investing in the future is laudable, according to Oliver.

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