Apple (AAPL) Stock Analysis
The Apple dividend has been paid continuously since 2012 and increased for 6 consecutive years;
qualifying the company as a Dividend Challenger.
Dividend Yield: 1.4%
Current Dividend: $2.52
Cash Flow From Operations (CFO) Per Share (ttm): $12.41
Free Cash Flow Per Share (ttm): $10.04
Market Capitalization: $891 B
Enterprise Value: $921 B
Dividend Analyzer Checklist
(updated February 2018)
Valuation Score (20/34 points)
Free Cash Flow Yield (ttm): 6.0% (11/17 points)
EV to EBIT (ttm): 12.7
EV to EBITDA (ttm): 11.1 (9/17) points)
Price to Sales Ratio (ttm): 3.7
Price to Book Value (ttm): 6.1
Price to Earnings Ratio (P/E) (ttm): 17
PE 10: 32
Profitability Score (18/33 points)
Operating Earnings Yield (ttm): 7.4% (11/15 points)
Net Income (ttm): $50520 M
Gross Profit (ttm): $91920 M
Total Assets: $406790 M
Gross Profitability Ratio = GP / Total Assets: 23% (7/18 points)
Cash Return On Invested Capital (CROIC)(tttm): 22%
Return on Invested Capital (ROIC): 21%
Dividend Safety Score (24/33 points)
Dividend Payout Ratio (ttm): 26%
Cash Dividend Payout Ratio (ttm): 25% (11/12 points)
Net Financial Debt: $45250 M
Total Assets: $406790 M
Net Financial Debt / Total Assets: 11% (9/12 points)
Net Financial Debt to EBITDA (ttm): 134%
Piotroski Score (1-9) (TTM): (4/9 points)
TOTAL POINTS – (62/100) (50 is an average score)
Earnings Report: 2/01/18
Next Earnings Report: 5/02/18
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Rankings & Recommendations
(updated February 2018)
Apple is ranked #90 overall (out of 432) and #8 (out of 28) in the Technology Sector by the Dividend Analyzer.
Type of Investor / Recommendation
Large Diversified Dividend Portfolios / Should Be Included
Looking For Exposure to Technology Sector / Should Be Considered
Deep Value Investors / Watchlist
DVB Portfolio Stocks – Long
AAAMP Global Value Portfolio – None
AAAMP Retirement Growth & Income Portfolio – Long
AAAMP Treasure Trove Twelve Portfolio – None
Industry: Consumer Electronics
Apple designs, manufactures, and markets the iPhone, iMac, iPad, iWatch iPod, Apple TV, more than a million Apps, operating systems, iCloud, iTunes, ApplePay, accessories, service, and support for its products.
Initially Apple’s stellar growth record was due to its innovation and high quality products which yield a premium sales price. But as time goes by it’s becoming about their ecosystem.
The integration of Apple’s hardware, software, services, applications, etc. provide unmatched benefits to its users. With each generation of products Apple adds value through syncing these products to a greater degree.
Photos, projects, preferences, applications, media, etc. can be shared or copied among Apple devices with ease. This ecosystem is building a moat for Apple that its predecessors and competitors have not been able to achieve. The more Apple products a customer owns the less likely they will purchase a new, or replace an existing, product from a competitor.
Apple’s iPhone and iOS operating system are known for their quality, security, and integration abilities. These are the backbone of a successful product lineup and have given Apple the ability to obtain premium prices (high profit margins) for their favored brand.
Apple has a competitive advantage because of its sheer size and ability to vertically integrate. In other words, it controls manufacturing through ownership and/or extremely stringent standards, and owns its retail stores. This means it can control its component costs, maintain quality, and properly train its salespeople (excuse me, I mean “specialist” or “concierge” 😉 ) better than competitors.
In other words Apple’s core strength is its ability and understanding of how hardware, software, services, and third party applications are integrated into individual Apple devices so that customers are willing to pay a premium price for their products.
Technology is a brutal industry. Short product life cycles and fierce competition have knocked many industry leaders from their position. One product failure or mishap can do great damage to a brand in the technology industry.
Apple’s premium price strategy puts some limits on how large the company can grow. This is especially true in emerging and frontier markets where opportunities abound for the industry.
Apple will continue to strengthen its ecosystem by introducing, improving, and marketing new products. The Apple Watch, Apple Pay, and Apple TV are products that will increase integration and add value to the Apple user experience. Many consumers are looking forward to the Tenth Anniversary iPhone.
Competition. Apple is #1 right now, but that means everyone is trying to topple them through innovative new products or slashing prices. The current environment puts downward pressure on Apple’s high profit margin. Only constant innovation (to overcome short product life cycles), quality products and service, and greater ecosystem integration will allow them to maintain these high margins.