Some Muslims investors want to buy Apple stock, but they may be wondering if it is halal or not. To know if Apple is Shariah-compliant, we will use the following criteria. To find out whether Apple is Shariah-compliant, we will use the following three criteria:
- The business activity
- Interest-bearing debt to company’s market capitalization
- Interest-bearing securities to company’s market capitalization
Apple’s Business
Stock – Apple
Ticker – NASDAQ: AAPL
Sector – Technology
Compliance Status – Questionable
Why it is a buy – Substantial growth over the past five years
Apple Inc was founded by Steve Jobs and two other guys, Steve Wozniak and Ronald Wayne in 1976 to develop and sell a personal Computer. Currently, it designs, develops, and sells consumer electronics, computer software, and online services. Apple is well-known for its mobile devices, such as the iPhone, iPad, Apple TV, Apple Watch, Apple Pay, Mac, iPod, iOS operating systems, iCloud, and a variety of accessories and other service offerings. Apple’s services include AppleCare, Apple Pay (makes money through transaction fees), Apple Store, iTunes, iCloud, and Apple Music. The company is one of the Big Five companies like Amazon in the USA information Technology industry. Furthermore, Apple is the world’s third-largest mobile phone manufacturer.
Financial Screening
Firstly, we check business activity to know if Apple is halal. The company’s impermissible business activities account for only 0.27% of its overall revenue, and 3.82% of its revenue comes from doubtful segments. So, we can see that Apple’s non-shariah compliant business activities do not exceed 5% of total revenue, and it is found to be halal.
Secondly, we screen its interest-bearing debt ratio. The debt amount should not exceed 30% of its market cap. In the case of Apple, the percentage of interest-bearing debt is 5.90% of its market cap. So, we can conclude that it meets the criteria.
| Total Debt | $112.94B |
| 36 Months Average Market Cap | $1.91T |
Finally, we screen the interest-bearing securities ratio. Apple’s interest-bearing securities account for 2.69% of its market cap. The number of securities that aim to receive interest should not exceed 30% of its market cap. So, it meets the last criteria as well.
| Cash & Equivalents | $51.49B |
| 36 Months Average Market Cap | $1.91T |
We at Musaffa found that Apple is one of the Halal stocks. However, Apple gets 1 score on the Musaffa platform, which means it is one of the least compliant stocks on our platform. Allah knows best.
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