Following iPhone 6 Launch, Apple's Shows Excellent Dividend Growth Potential
Staff Reporter | | Sep 16, 2014 09:25 AM EDT |
(Photo : Reuters) Apple CEO Tim Cook speaks at the launch of the iPhone 6 and 6 Plus
Apple's September 9 press event gave a preview of what people can expect from the company's cycle and performance. Investors and analysts were shown the company's immense dividend growth potential in the next few years.
Analysts pointed out that the company will enter into another "Super Cycle" as experts compare the iPhone 6 release to that of the iPod and iPad era. According to The Street, Apple's trading went lower following the company's announcement of record breaking iPhone pre-orders. The iPhone 6 cycles can be compared with the performance of the iPod and iPad when they were first introduced. Apple also noted that it sold over 4 million units within 24 hours following the pre-order announcement. To further prove the company's growth potential, Apple claimed that the number of pre-orders surpassed their expectations, thereby causing some customers to have to wait until October to get their units as Apple's initial supply went out of stock immediately.
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Seeking Alpha pointed out that the tech giant's present shares yielded 2 percent. Apple's dividend has also increased with 12 percent annualized rate. Considering the earnings estimates and analysts' opinions, Apple can increase its dividend by as much as 30 percent yearly from 2014 to 2017.
The company has been in the news throughout the weeks and even after its press event. Major announcements like the launching of the iPhone 6, iPhone 6 Plus, Apple Pay, and Apple Watch got the market buzzing continuously. In a standard setting, 10 percent growth is an incredible feat, but it is a different case with Apple. Analysts are banking high on the growth of the company. Should the company decide to focus on this matter, industry observers believe that a 30 percent dividend growth rate is possible in three years.
Steve Jobs previously did not approve paying dividends. He once said: "We know if we need to acquire something - a piece of the puzzle to make something big and bold - we can write a check for it and not borrow a lot of money and put our whole company at risk."
Apple appears to be turning over a new leaf.
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