Is 4% the New $1000 for Apple Inc. (AAPL)?

Page 1 of 2

It was not that long ago that Apple Inc. (NASDAQ:AAPL) was being touted as a $1000.00 stock. Now, trading at around $450.00 a share after a 52-week high of over $700.00, recent articles have called for Apple to increase its dividend yield to 4% in order to be more attractive to investors.

Apple Inc. (NASDAQ:AAPL) certainly has enough resources to raise its dividend from 2.34% to well over 4% without harming its cash flow. Like Intel Corporation (NASDAQ:INTC) and Microsoft Corporation (NASDAQ:MSFT), other tech giants with robust dividend yields, Apple is very profitable with high margins and a low dividend payout ratio.  But the dividend, a recent re-introduction after a long absence, was meant to be the dessert, not the main course in the menu of offerings for investors to select from in choosing Apple as a buy.

Apple Inc. (NASDAQ:AAPL)As with anything in life, Apple Inc. (NASDAQ:AAPL)’s greatest asset, the iPhone, is also its greatest weakness.  Much of the success for Apple as a stock in its surge to over $700 a share was due to the sales and margins of the iPhone.  But the competition is much stronger now in the smartphone sector, which is harming the stock price of Apple.

Samsung, working with Google Inc (NASDAQ:GOOG), the search engine behemoth, now sells the most smartphones in the world. The Galaxy III of Samsung supplanted the iPhone as the world’s top selling smart phone. Nokia Corporation (NYSE:NOK), using the Windows Operating System from Microsoft, has rebounded due to Lumia smart phone sales. Blackberry, formerly Research In Motion Ltd (NASDAQ:BBRY), has so staked its survival on the sales of the Blackberry Z10 smart phone that it changed the company name!

What was at one time an overwhelming profit margin for Apple Inc. (NASDAQ:AAPL) is now beneath that of Microsoft’s and in the range of that for Google and Intel.  The profit margin for Apple has fallen over the last year as it has been strong for Microsoft for the same time segment.  It is also much the same story for Apple Inc. (NASDAQ:AAPL)’s diluted quarterly earnings-per-share on a year-over-year basis.

With the earnings-per-share and profit margin falling along with the stock price, Apple pretty much becomes an income stock for those looking for a positive return.  Down more than 25% for the last six months, a positive return has not been coming from the share price for quite some time.  The company is also cutting back on orders from suppliers, a certain negative tell for the future.  Apple Inc. (NASDAQ:AAPL) is also trading well below its 20-day, 50-day, and 200-day moving averages, which is a bearish indicator that the share price might not be rising anytime soon, either.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

The 5 Most Popular Rap Songs of All Time

The 10 Countries that Eat the Most Meat

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!