Most investors look at a company's growth possibilities when evaluating a stock purchase. That is understandable. However, increasing revenue and earnings isn't the only way to boost a stock's worth.

Reducing a company's outstanding shares is another frequently ignored method of increasing the value of existing shareholders' stakes. The corporation only needs to repurchase its shares on the open market and then remove them from circulation.

Apple's Commitment to Share Buybacks

Apple (NASDAQ: AAPL) is one of the more famous companies that have embraced this idea. While it pays payouts, it chooses to reward investors by purchasing its stock rather than increasing dividend payments. Over the last four reported quarters, Apple has spent $78.1 billion to repurchase 456 million shares of its stock. For reference, Apple's current market valuation is $2.6 trillion, with about 15.58 billion outstanding shares.

The stock repurchase program is doing little to benefit shareholders. However, keep things in perspective. This is a huge company. It will take a lot to make a positive change in its float. Given what is possible, Apple's repurchase program is extremely outstanding.

It's also worth noting that the corporation is still making net progress in reducing the supply of shares to increase the value of the ones that remain. Unlike many other firms, this one does not issue new stock at the same rate as it repurchases and retires existing shares. As of the end of last year, there were around 2% fewer outstanding Apple shares than a year ago.

Another bullish argument

Is the company's stock repurchase program a sufficient inducement to buy Apple stock? No. However, Apple's regular net share repurchases enhance the positive case for owning the stock. The fact is, even if Apple were to issue additional shares of itself, it would still be an excellent investment.

Should you invest $1,000 in Apple right now?

Before you buy Apple stock, consider this:

According to the Motley Fool Stock Advisor analysis team, Apple is not among the top ten stocks to invest in right now. The ten equities that cut might provide massive gains in the next years.

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