A Dividend Stock to Buy: Apple, Inc.

With its dividend yield back at 2.5%, here's why the tech giant is looking compelling again.



On May 31, 2013, I called Apple (NASDAQ:AAPL) a dividend investor's dream stock. After the stock's 26% sell-off in the past 12 months, is it almost worthy of such a bullish name again?

When brand power, a cheap valuation, and dividend growth collide
The last time I called Apple a dividend investor's dream stock, its dividend yield was only 2.5% -- subpar compared with many popular large-cap dividend stocks, which often have yields above 3%. But Apple stock's value to income investors at the time was found in more than its yield. When this yield was combined with the undervalued characteristics of the stock and the dividend's growth potential, Apple looked like a downright bargain. At the time, shares were trading at a split-adjusted $63.60.

Almost three years later, investors who bought shares at the time have seen a 47% gain -- and that's not even including dividends. This return nearly doubles the S&P 500's rise during the same period...

Source: The Motley Fool


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