Dividend Investing Ideas Center
Have you ever wished for the safety of bonds, but the return potential...
Sam Bourgi Sep 12, 2017
With today’s expected announcement of the iPhone X, investors are actively monitoring Apple Inc. (AAPL ) for signs of future growth. As the world’s most valuable brand, Apple has offered its shareholders tremendous value over the past decade. The key question now is whether the 10th anniversary product release can propel the tech giant to new heights.
Each year iPhone enthusiasts line up for hours and even days to get their hands on the newest Apple product. There’s reason to believe the launch of the iPhone X will be even greater due to pent-up demand ahead of the 10-year anniversary product. Apple is expected to announce three new phones today: the iPhone X and the less impressive iPhone 8 and 8 Plus The iPhone X is expected to be Apple’s most expensive yet, with some estimates showing a price tag of $1,200.00.
The Cupertino, CA-based company believes the iPhone X’s new features are well worth the price. Everything we’ve heard about the new iPhone points to a major redesign that will expand the device’s screen to give edge-to-edge display. Facial recognition software, a 3D camera and wireless charging are also expected to be part of the specs. The new iPhone is also expected to introduce augmented reality in directing users around towns and cities. All these features will be delivered on top of the iOS 11 operating system, which was launched in June, and is already installed on several hundred million iPhones.
From an investor’s perspective, a higher-priced iPhone could generate bigger revenues. The success of the new operating system is also expected to draw more developers. Combined with new product features, the forthcoming iPhone product could become a major driver of future growth.
Apple has also committed $1 billion for original content, a sign that the tech company is branching out beyond the hardware market. In fact, a billion-dollar operating budget begins to approach content creators like HBO that doled out around twice that level last year.
Want to learn more about Apple’s unique history? Click here for the complete history of Apple stock.
The stock’s performance over the past nine months clearly shows that fears over ‘peak Apple’ were largely overblown. The company’s stock has returned almost 40% year-to-date, dwarfing the S&P 500 Index and the Dow Jones Industrial Average, of which Apple has a membership. Apple has even outperformed the S&P 500’s Information Technology Index, which has gained nearly 25% since the start of 2017.
Apple has boosted shareholder value by announcing a $300 billion share buyback plan that will continue until March 2019. The company has already executed three-fourths of the buyback plan, and recently announced plans to offer $5 billion of debt in four parts.
Earlier this year, the iPhone maker announced a 10.5% increase in its annual dividend, giving it the title of world’s biggest dividend payer. In doing so, the company surpassed Exxon Mobil (XOM ) as dividend king.
Click here to read about how Apple share price responds to product releases.
Apple posted better-than-expected earnings and revenue during the third quarter as iPhone sales topped estimates. Investors had anticipated a “lame duck” quarter ahead of the new iPhone launch. The company reached a milestone in the third quarter by growing its services unit’s revenue to a new record high. Sales from Apple’s services category – which includes iTunes, iCloud, Apple Pay, Apple Music, AppleCare and the App Store – rose 22% annually, to $7.3 billion in the third quarter. According to CEO Tim Cook, the company’s services category alone is big enough to be its own Fortune 100 company.
The company also managed to increase year-over-year dividends – something it has done consistently since it became a dividend payer four years ago. The iPhone maker yields 1.59%, which is above the technology sector average.
These metrics clearly show that Apple continues to outperform. A successful 10th anniversary product launch could put the technology giant in the driver’s seat for the foreseeable future.
Dividend.com’s Dividend Screener is the go-to method for finding and analyzing high-quality dividend stocks. Use this tool to explore the best dividend plays across all industries, and feel free to sort stocks based on our proprietary DARS rating system.