What to expect?
Apple may become a dividend investor’s best friend. Google, on the other hand, doesn’t currently offer dividends, while Samsung shows a dividend yield of 0.6%. By 2015, Apple Inc. (NASDAQ:AAPL)’s dividend yield could drastically surpass its current level of 2.6%, due to the $100 billion being released to shareholders. This could make Apple’s stock very appealing for the right investor.
Apple Inc. (NASDAQ:AAPL)’s mobile mindset will not change. The iPhone and iPad accounted for nearly 74% of Apple’s 2012 revenues. Not only has it embraced the mobile idea, but global tablet sales are expected to surpass desktop, laptop sales by 2015. In fact, the iOS platform, as a whole, has a 90% retention rate–not surprising considering their loyal customers.
Valuation
| P/E | FCF yield | Earnings yield | |
| Apple | 10.2 | 11% | 9.8% |
| 26.7 | 4.1% | 3.7% | |
| Samsung | 8.6 | 5.4% | 8.6% |
Apple is clearly the cheapest of these three competitors, with Google Inc (NASDAQ:GOOG) undoubtedly being the most expensive. However, let’s take a look at what potential investors would receive for the premium they pay.
| Company | Revenue | Earnings Per Share | Gross Margins |
| Apple | $169.1 bil | $41.89 | 37% |
| $53.5 bil | $34.50 | 57.4% | |
| Samsung | $179 bil | $137.02 | 37% |
Google Inc (NASDAQ:GOOG) may have higher gross margins, but it generates approximately 77% of its revenue from ads. Mobile ad revenue is expected to increase by 5.1% in 2013, which means their mobile ads would make up 17.6% of their overall revenue. Meanwhile, Google Phone and Motorola revenues are expected to decrease by 1% which will account for only 10.8% of the company’s revenue.
The bottom line
Some people like change, and others don’t. I think that is the essence of what’s going on with Apple Inc. (NASDAQ:AAPL). It might not be the growth stock that it once was, but it’s transformation into a new animal has certainly begun. Investors should receive stout dividends from Apple, but may not receive the growth shareholders have become accustomed to. Google Inc (NASDAQ:GOOG) and Samsung are clearly solid companies, with lots of potential. Google is not cheap by any stretch of the imagination, but Samsung offers a reasonable premium for the right investor.
The article Apple: A Change of Fate originally appeared on Fool.com and is written by Tyler Wofford.
Tyler Wofford has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG). Tyler is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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