Visa And Apple: Cash-Generating Machines

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Strong cash flows reflect financial stability, allowing companies to pay down debt, pursue growth opportunities, and shell out dividend payments.

These companies are also better equipped to weather downturns, providing another beneficial advantage for investors from a long-term standpoint.

And for those seeking cash-generating machines, two companies  – Visa (V - Free Report) & Apple (AAPL - Free Report) – fit the criteria nicely, with each also on the reporting schedule in the coming days.  Let’s take a closer look at how each currently stacks up.

Apple

Apple has long been a cash-generating machine, providing many benefits over the years, including higher dividend payouts. In fact, Apple has paid higher dividends for 13 consecutive years, owing to its shareholder-friendly nature.  

Shares yield a modest 0.4% annually, though the company’s 5.0% five-year annualized dividend growth helps bridge the gap. On a trailing twelve-month basis, the tech titan has generated a massive $129.1 billion in free cash flow.

EPS and sales revisions for the upcoming release have risen over the last several months heading into the release, showing a high level of stability.

Image Source: Zacks Investment Research

Visa

Visa has similarly sported a long-established reputation of generating huge amounts of cash, with its overall defensive qualities also a big positive of the stock. The company is well on its way to becoming a Dividend Aristocrat, upping its payouts for roughly 17 consecutive years.

Shares yield a respectable 0.8% annually at the present, with Visa also sporting a sizable 16.3% five-year annualized dividend growth rate. The financial titan has generated $21.2 billion in free cash flow over the trailing twelve months.

The outlook heading into the release is positive, with both EPS and sales expectations trending higher over recent months.

Image Source: Zacks Investment Research

Bottom Line

Companies with strong cash-generating abilities are great targets, as they have plenty of cash to fuel growth, pay out dividends, and easily wipe out debt. And as mentioned above, these companies are better equipped to handle an economic downturn, undeniably a positive.

For those seeking cash-generators, both companies above – Visa and Apple – fit the criteria nicely, with each also on the reporting docket in the coming days. EPS and sales revisions for each have remained positive over recent months, providing a nice level of positivity and stability as we inch closer.