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Apple: $500 Stock, $100 Billion Cash, No Dividend

29 February 2012 4 Comments

Apple Inc (AAPL) is the most popular company on the planet, and the most popular stock in the investing world. Due to its recent run over the last few months, the stock has eclipsed the $500 level and has even begun to approach a $500 billion market cap! Apple has left Exxon Mobil in the dust as the largest company on the planet. Impressive.

In the news today is the fact that Apple once again did not announce a dividend. With the $100 billion in cash on its balance sheet (and growing each quarter), most assumed it was definitely coming with this shareholders meeting.

Regardless, a 2% yield on this stock isn’t exactly a game changer. Apple has flat out been killing it. 2% here or there doesn’t exactly move the needle. Perhaps, management knows a small dividend yield doesn’t do much for them, and perhaps it shifts the focus from a growth stock to a “value” stock.

As the largest US company and a $460 billion-ish market cap, it’s hard to be sure you’re going to get a ton of upside at current levels. The problem with that statement, of course, is that we’ve been saying that since Apple was in the $200’s. Apple dominates smart phones and tablets, and interestingly, there’s a market that Apple is rumored to penetrate that could be bigger than both.

Televisions. TVs are dying for innovation. For a decade, tech companies have been trying to “conquer the living room” unsuccessfully. If someone can refresh the most centric device in people’s homes – the television – it is Apple. A new interface, sleak design and a way to choose television content in a more a la carte manner, this is what Apple did to the music industry. Could they do it to the television / cable industry? I sure hope so.

If Apple can repeat what it has done in mp3 players, smart phones and tablets, then $500 will seem cheap a few years from now. We could be looking at a $1000 stock. Crazy I know. Even more crazy? You might finally get your dividend too.

4 Comments »

  • Angel Merrill said:

    Wow! That's a huge amount of money! Apple is quite doing what they can do to provide more useful gadget though with so many competition they still gamble with creating some good quality gadget.

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  • eavedrop44 said:

    That's a huge amount of money! Apple is quite doing what they can do to provide more useful gadget though with so many competition they still gamble with creating some good quality gadget. professional translation