Question

Now let us assume you are interested in purchasing Apple Corporation's common stock.  To help you make a decision to purchase or not, provide a discussion to support your decision. For example, consider current economic events, competition, financial strength (or issues) based on important ratios, and current market price for Apple.   Any other information that you wish to consider should also be included. Make sure you include your decision to purchase Apple's common stock today or not.

Answer 1

Cash (and Apple) is king. The value of cold, hard cash is difficult to overstate. In recent years, Apple's enormous cash hoard has reached downright legendary levels. At the end of June 2020, the company had just less than $194 billion in cash and investments – money it routinely returns to shareholders through stock buybacks and dividends.

Currently, Apple's 0.9% dividend yield is modest – but it's nothing to scoff at, especially since the company has set the precedent of raising its payout annually since first instituting the quarterly stipend at the behest of shareholders in 2012. Since then, the company's quarterly dividend has more than doubled, from a split-adjusted 38 cents per share to 82 cents per share today.

The company increased its dividend by 16% in fiscal year 2018, 5% in 2019 and 6% in 2020.

Over the years, Apple has spent literally hundreds of billions on share buybacks, which helped send the stock price to more than $400 per share by late July. In its most recent earnings report, Apple announced a 4-for-1 stock split, its first split since 2014, that will "make the stock more accessible to a broader base of investors." It's the fifth stock split in company history; for every Apple share an investor in early 1987 owned, they will own 192 Apple shares after the 2020 split goes through on Aug. 31.