Apple Headlines and Whispers
During the last earnings announcement, everyone was wondering what Apple would do with all its cash… and there was no clear decision provided. The most popular expectation is for a dividend payment to faithful shareholders. In fact, much of the year to date buying can be attributed to this anticipated announcement. But there are other headlines and rumours that are also helping Apple stock steadily climb.
- iPad3 – Most people believe Apple will reveal the iPad3 at the upcoming media event in March. A new version has been widely anticipated for months with the expectation that it will somehow address the growing competition from other lower priced tablet makers. While Apple dominates the higher end tablet market, the lower priced tablets are gaining momentum amongst consumers.
- Dividend – Apple is so cash rich… with over $98 Billion in cash. Many analysts expect Apple to share some of that cash by declaring a $2 quarterly dividend to shareholders by the end of 2012. This would be reasonable if you compare the potential dividend payment with other cash rich technology companies such as Microsoft and IBM. Essentially, as noted by Bloomberg analysts, a $2 dividend amounts to only $7.5 Billion a year. More importantly, a dividend could attract a new class of investors that only hold dividend-paying stock companies. This expected $2 dividend equates to only 1.5% yield at today’s prices… modest at best with plenty of room to grow.
- iPhone4s – It’s almost as if people have forgotten about Apple’s expansion into China. There are huge overseas markets that are just starting to embrace the iPhone… with markets far greater than that of North America. Watch for Apple to continue its overseas expansion without sacrificing its local service.
Dividends are all the rage today… and, unfortunately, many investors buy stocks of companies who pay a dividend but have a falling stock price. So when a company with accelerated revenue is rumoured to provide a dividend, it generates true excitement. So don’t be surprised to see Apple rumours continue to propel the Nasdaq to 3000 and beyond, bringing us back to the days of pre tech bubble deflation!