Apple Inc. (AAPL)’s iPhone Gains in Popularity, Yet Stock Falls…

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First, trading at a P/E of 9.6, it’s roughly half the market’s current overall valuation, yet offers a dividend yield of 2.5%.

Second, it remains the dominant force in a growing, future-oriented industry. Google’s Android OS gained 17 million users over the past year, whereas the iPhone added over 20 million. Apple was able to steal 4% of U.S. market share in the quarter ending in February, with Google and Blackberry both losing about 2%. Apple’s phones have not lost popularity, even though the stock has.

And the iPhone is just a piece of the Apple story, making up 51% of Apple’s revenue last quarter. The iPad made up 20%, and Mac 10%. These products are best in class, which gives them higher pricing power even if the industries trend toward commoditization. Add in future product developments, and Apple Inc. (NASDAQ:AAPL) deserves a higher valuation.

The one question, however, is whether or not the market will shake its negative feelings toward Apple. It’s impossible to say if and when that could occur, but if investors are looking for a solid dividend in a solid company with a solid grip on the future, Apple is it.

The article The iPhone Gains in Popularity, Yet Apple Stock Falls originally appeared on Fool.com.

Fool contributor Dan Newman has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.

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