Analyst: Hey Apple, Learn From IBM

“We believe the comparison of the two companies highlights the importance of consistent, meaningful cash return, particularly to value/GARP investors, who remain under-represented in Apple’s stock,” wrote the analyst, who has an Outperform rating on the iPhone maker.

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“We continue to espouse that Apple look to take on debt and commit to a meaningful return of its ongoing free cash flow generation,” he added.

Sacconaghi said he would like to see Apple announce that it intended to return between 50 percent and 70 percent of its ongoing free cash flow cash to investors every year and use a combination of vehicles to do so, including dividends and preferred stock.

Here’s how Apple, IBM and Microsoft have traded over the past 5 trading sessions:

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