This Top Warren Buffett Stock Just Gave Investors 29 Billion Reasons to Cheer

Although Warren Buffett is no longer CEO of Berkshire Hathaway, his investment philosophy will always influence certain market participants. One of the Oracle of Omaha's favorite attributes in a business is capital returns, as it can indicate that the company operates from a position of financial strength.

In the same vein, this top Warren Buffett stock recently gave investors 29 billion reasons to cheer. Here's what you should know.

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So much cash

During its fiscal 2026 first quarter (ended Dec. 27), Apple (NASDAQ: AAPL) continued to do what it has done for a long time: It returned capital to investors. The business paid $3.9 billion in dividends. And it repurchased $25 billion worth of its stock. Combined, that's close to $29 billion going back to shareholders (excluding cash used to settle vesting restricted stock units for employees).

This showcases management's clear focus on prioritizing its investor base. This sort of capital allocation policy can be beneficial to shareholders. Dividends add a steady stream of income. And buybacks raise the ownership stakes of existing investors, boosting earnings per share.

That $29 billion capital return totals $116 billion on an annualized basis. That's a massive sum that's a higher figure than the market capitalizations of all but 188 publicly traded businesses.

Apple can afford this strategy because of how financially sound it is. The company has $145 billion in cash, cash equivalents, and marketable securities on the balance sheet. It collected $42 billion in net income and registered $54 billion in cash flow from operations just in Q1.

Apple's strong position

Since Apple shares currently trade at a price-to-earnings ratio of 33.7, which is certainly expensive, investors shouldn't buy the stock if they're seeking market-beating returns. The consumer tech enterprise's shares might perform in line with the S&P 500 index over the next five years, given how well shares have done over the past 10 years.

Apple's dividends and buybacks have been in place since 2012. And they're going to continue.

That confidence stems from Apple's powerful competitive position, supported by its incredible brand recognition. Investors can give credit to the company's storied history of top-notch innovation capabilities that help it introduce popular products and services to consumers across the globe. This drives pricing power and customer loyalty.

The result is that Apple is in a financial position that is the envy of other businesses. As long as it keeps posting impressive profitability figures, dividend payouts and share repurchases will be included in the leadership team's capital allocation policy.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.