03-22-2013, 03:30 PM
I don't know, Keith. Apple's share price fall certainly was dramatic, and anyone who got in at high prices is surely feeling the pain. But most of the conversation about Apple focuses on the share price and on how much capital you lost if you bought too high.
But I think the under-reported and under-discussed story is about AAPL as a potentially incredible dividend growth stock. True, they just (re)initiated the dividend last year, so there is not much of a track record to rely on. But at today's prices, AAPL is yielding almost 2.3%. Not great, but not too shabby, either. And I'm guessing that a significant raise will be announced this year -- and maybe soon. They are under so much pressure to do something with the giant cash pile, and improving the dividend payout, along with increasing the share buyback program are no-brainers. They generate so much revenue and free cash that they will be able to afford to increase the dividend by reasonable amounts for years to come.
Of course, investing in AAPL for dividend growth is not like taking a position in JNJ or PG. Much more uncertainty and volatility around the share price, and most importantly, about the security of future earnings. But AAPL could turn out to be an excellent DG play in the short to medium term, at least.
But I think the under-reported and under-discussed story is about AAPL as a potentially incredible dividend growth stock. True, they just (re)initiated the dividend last year, so there is not much of a track record to rely on. But at today's prices, AAPL is yielding almost 2.3%. Not great, but not too shabby, either. And I'm guessing that a significant raise will be announced this year -- and maybe soon. They are under so much pressure to do something with the giant cash pile, and improving the dividend payout, along with increasing the share buyback program are no-brainers. They generate so much revenue and free cash that they will be able to afford to increase the dividend by reasonable amounts for years to come.
Of course, investing in AAPL for dividend growth is not like taking a position in JNJ or PG. Much more uncertainty and volatility around the share price, and most importantly, about the security of future earnings. But AAPL could turn out to be an excellent DG play in the short to medium term, at least.