You’ve heard about this technology giant and now you are interested in purchasing their stock. Let’s take a current look on how they are performing and whether or not you should be looking to buy their stock right now. The current price of Apple as of 7/26/2013 is 439.36.
Apple recently started paying dividends again in August, 2012. They are currently paying a modest dividend of around 2.8%.
A market cap is the current valuation of the company on the stock market. Any long-term investor is taught that stocks with a market cap above roughly 25billion are a safe investment. Apple currently has a market cap of over 410billion.
The 10-year performance of Apple is absolutely astounding. While the technology bubble burst of 2000 contributes to this 10 year return, it doesn’t take away the fact that Apple is an amazing company. The 10 year average annual return of Apple from 2002 – 2012 is a whopping 53.845%. This compares to the tiny 10-year performance of the S&P 500 of 4.332%. Apple performed 12.5 times better than the S&P 500 in the last 10 years.
Using this calculator I wanted to see how $10,000 in Apple would do over the past 10 years.
Starting Value: $10,000
Annual Yield: 53.845%
Maturity Date: 10 Years
Ending Value: $742,734.95
As unrealistic as that sounds feel free to put the information into the calculator yourself and be amazed.
I decided to look at the 25 year performance of apple to get a more realistic look of how it may perform going into the future. From 1987 to 2012 Apple has had an 17.004% average annual return. This gives us a more realistic outlook on how the stock will perform in the future.
I’m going to use the same calculator as above and do the earnings with this average annual return over the last 30 years with the same $10,000.
Starting Value: $10,000
Annual Yield: 17.004%
Maturity Date: 25 Years
Ending Value: $507,011.41
This just goes to show how important the average annual yield is.
Apple recently underwent a huge drop in the stock market. It is currently at around $440 while its 52-week low is $385. This means that it has tremendous opportunity to grow as capital gains.
After seeing the 10-year average return of Apple, the 25-year average return, the fact that it pays a 2.8% dividend and it is currently really cheap, I rate apple as a Strong Buy for a long term investor or even a shorter term investor. There is tremendous opportunity in this stock to increase in share price into the future.