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How do slow growing companies create value


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I noticed some companies that have slow growth seem to be quite capable of creating value, and therefore shareholders do well as the share price appreciates.


Example, AAPL since 2015 revenue has been around $ 240B a year

Boeing, HD, etc. 


I was wondering if the value has been created because of improved margins...




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Generally speaking, a company can do this by:


1. Improving net margins (most obviously).

2. Improving capital efficiency.  (I.e., finding ways to generate similar or greater net income with less capital employed).  This helps because it frees up some capital that can be immediately distributed to shareholders and also because it can improve the returns on future retained profits.

3. Buying back shares.  This alone doesn’t make the company as a whole more valuable (unlike 1. and 2.) but it does increase value per share.


For companies like Apple, the recent tax reform was a big deal because it helps them on all three fronts (lower corporate tax rates improve their net margins; lower tax rates on cash repatriations help them improve their capital efficiency; and both provide some extra cash for accelerated share repurchases). 

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