Top-Ranked Apple ETFs to Buy on Strong Q3 Earnings
After the closing bell yesterday, Apple Inc. AAPL encouraged investors with robust third-quarter fiscal 2019 results, wherein it topped both earnings and revenue estimates. The technology giant returned to revenue growth after two consecutive quarters of decline and offered a better-than-expected outlook for fiscal fourth quarter (read: Tech ETFs Brush Aside Antitrust-Led Slump to Hit Highs).
In fact, Q3 was the biggest quarter ever driven by all-time record revenue from services, accelerating growth from wearables, strong performance from iPad and Mac, and significant improvement in iPhone trends.
Apple Q3 Results in Focus
Earnings per share came in at $2.18, beating the Zacks Consensus Estimate by 8 cents but declining 7% from the year-ago earnings. Revenues rose 1% year over year to $53.8 billion and edged past the estimate of $53.3 billion.
iPhone sales declined 12% year over year and accounted for 48.3% for overall revenues. This is the first time iPhone did not contribute over half of Apple’s sales since 2012. Services revenues, which consist of iTunes, Apple Music, iCloud, Apple Pay and Apple Care, climbed 13% year over year to a record $11.5 billion and accounted for 21% of total revenues. Revenues from Mac, and Wearables, Home and Accessories are up 10.7% and 48%, respectively, while iPad revenues increased 8.4%.
The gadget-maker foresees total revenues in the range of $61-$64 billion for the third quarter of fiscal 2019. The low-end of the guidance is above the current Zacks Consensus Estimate of $60.77 billion. The upbeat guidance reflects optimism surrounding the iPhone models set to launch later this year (read: Apple May Buy Intel's 5G Modem Business, ETFs to Rally).
Market Impact
Following the results, shares of Apple climbed nearly 4% to 2019 highs in aftermarket hours on elevated volume. With this gain, Apple reclaimed its trillion-dollar market capitalization. The stock currently has a Zacks Rank #3 (Hold) and a solid Value Score of B. Additionally, it belongs to a top-ranked Zacks industry (top 39%), suggesting some smooth trading based on quarterly results (see: all the Technology ETFs here).
ETFs to Tap
Given this, investors could consider the following ETFs with the largest allocation to the tech titan. These funds have Apple as the second firm with a double-digit allocation and sport a Zacks Rank #1 (Strong Buy) with a Medium risk outlook.
Select Sector SPDR Technology ETF XLK
This most-popular technology ETF has $22.3 billion in AUM and charges 13 bps in fees per year from investors. AAPL makes up for roughly 16.6% of assets (read: 5 Stocks That Drove Tech ETF to an All-Time High).
iShares Dow Jones US Technology ETF IYW
This ETF provides investors exposure to technology stocks with 14.6% allocation in Apple. The fund has AUM of $4.4 billion and charges 43 bps in fees and expenses.
Vanguard Information Technology ETF VGT
This fund manages about $21.5 billion in its asset base with 14.9% allocation in Apple. It has 0.10% in expense ratio.
MSCI Information Technology Index ETF FTEC
With AUM of $2.6 billion, the product allocates 15% in Apple. The ETF has 0.08% in expense ratio.
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Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Fidelity MSCI Information Technology Index ETF (FTEC): ETF Research Reports Vanguard Information Technology ETF (VGT): ETF Research Reports Technology Select Sector SPDR Fund (XLK): ETF Research Reports iShares U.S. Technology ETF (IYW): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
