Apple Inc. (Nasdaq: AAPL) investors may not have gotten the clarity they had hoped for at the company’s annual shareholder meeting, but they did get some important hints about Apple’s priorities in the year ahead.
Apple CEO Tim Cook didn’t tip his hand when he was asked Tuesday about Apple’s capital return plan once it repatriates roughly $250 billion in overseas cash. Cook says he is not a fan of large special dividend payments, and regular annual dividend hikes are in the best interest of long-term investors.
“Annual increases in the dividend [are] something that this board and this management team is committed to doing,” Cook says.
Apple has increased its dividend in each of the last five years, but its yield is still a below-average 1.5 percent.
Apple also gave no hints about potential merger deals. In its most recent earnings report, Apple says it intends to ultimately reduce its net cash position to “approximately zero,” leaving analysts to speculate about a major blockbuster acquisition, a 10 to 15 percent dividend hike and/or a special dividend payout of up to $15 billion.
Although Cook stayed true to his reputation for secrecy when it comes to capital returns, he did drop some hints about where Apple will be looking for growth now that iPhone sales are showing signs of slowing.
Cook says he is excited for Apple to expand its reach into the health care business, including a plan to allow iPhone users to download electronic health records directly to their phones. “The more and more time we spend on this, the more and more excited I am that Apple can make a significant contribution to people’s lives in this area,” he says.
In addition to health care, Cook said he has been disappointed at Apple’s progress with Apple Pay, particularly in the mobile payments market. Cook said he sees major growth potential for Apple Pay, especially in international markets such as China, Russia and Japan.
Apple stock is down 7.2 percent in the past month after iPhone unit sales disappointed the market in the most recent quarter. However, GBH Insights head of technology research Daniel Ives says the market is being overly pessimistic about the iPhone.
“You have 350 million iPhones that are coming up for an upgrade over the next 12 to 18 months. …That’s…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
