Shares of Apple Inc (NASDAQ:AAPL) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.73 per share, investors must have owned the shares prior to 11 May 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Should you diversify into Apple and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. View our latest analysis for Apple
5 questions I ask before picking a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is it the top 25% annual dividend yield payer?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has dividend per share amount increased over the past?
- Does earnings amply cover its dividend payments?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does Apple pass our checks?
The current trailing twelve-month payout ratio for the stock is 24.20%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 22.95%, leading to a dividend yield of 1.62%. In addition to this, EPS should increase to $12.31. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Unfortunately, it is really too early to view Apple as a dividend investment. It has only been consistently paying dividends for 6 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Apple produces a yield of 1.59%, which is on the low-side for Tech stocks.
If you are building an income portfolio, then Apple is a complicated choice since it has some positive aspects as well as negative ones. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three essential aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for AAPL’s future growth? Take a look at our free research report of analyst consensus for AAPL’s outlook.
- Valuation: What is AAPL worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether AAPL is currently mispriced by the market.
- Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
How is Warren Buffet’s advice working out for Bill Gates?
Bill Gates dropped out of college to found Microsoft. He’s a prodigy who has become one of the richest men in the world. But when it comes to the stock market, he follows the advice of billionaire investor Warren Buffett. So what stocks is he holding today? Click here to view a FREE detailed infographic analysis of Bill & Melinda Gates Foundation’s portfolio.