Apple Inc. (NASDAQ:AAPL) has lost over $180 worth of its share price over the last three months – a 26.6% decline – but there are plenty of reasons for Cupertino bulls to consider buying on the dip. We’ve covered these catalysts individually before, but it’s important to note what some of the tech world’s top analysts are saying as well.
Gene Munster, of Piper Jaffray, has been very outspoken about Apple lately, calling for a TV to be introduced next fall, while maintaining a $900 price target on the stock. On CNBC earlier this week, Munster introduced three concepts that he believes can boost shares of the tech company in 2013.
1) “An increased dividend in April.”
Regarding this point, there’s no argument that Apple Inc. (NASDAQ:AAPL) has the cash to increase its dividend yield. With an estimated $120 billion in cash, some estimates call for this balance to double, perhaps even reaching $300 billion by 2015.
Now, it appears that Apple will not use some of this liquidity to pay a special dividend to help shareholders fight a likely rise in taxes on capital gains and dividends (see Will Apple Pay a Special Dividend?), so Munster’s prediction is logically valid. What remains to be seen, however, is if Apple performs any major acquisitions next year, or continues to support Sharp, as one analyst suspects.
According to Barron’s, Apple’s payout ratio is “20% of projected earnings,” which is far below the likes of Microsoft Corporation (NASDAQ:MSFT) (32%) and Cisco Systems, Inc. (NASDAQ:CSCO) (29%). At a projected yield of 2.0% – below Microsoft (3.3%) and Cisco (2.8%) – it’s very possible that Apple will want to reward its shareholders at a higher rate next year.
Now, it’s worth mentioning that Apple Inc. (NASDAQ:AAPL)’s yield is still above International Business Machines (NYSE:IBM) (1.75%) and Google Inc (NASDAQ:GOOG), which does not pay a dividend, so there is some justification if this prediction falls through.
Continue reading to see Munster’s next concept…