AAPL Stock Is Solid
By Tom Taulli
Apple (AAPL) stock has enjoyed a nice run lately and I think the momentum will continue into the new year. The main reason is that the company’s growth will likely get back into gear. And perhaps the biggest driver will be from the China Mobile (CHL) deal. Keep in mind that that company’s distribution includes over 750 million subscribers.
At the same time, AAPL stock should get a boost from the clear fact that products continue to resonate with consumers. The Apple iPad has become the must-have item of the Christmas shopping season, as seen with strong sales at Walmart (WMT) and Target (TGT).
It also helps that AAPL has broadened its product categories. For example, there are offerings like the iPad Air, iPad Mini Retina, iPad Mini and of course, the traditional iPad. In other words, Apple should have an easier time satisfying different consumers in terms of tastes, needs and income levels. All in all, all this should help to further boost the fortunes of AAPL stock.
Then there is the valuation on AAPL stock, which is still reasonable. Consider that the forward price-to-earnings ratio is only 11X, which compares to 20X for Google (GOOG) and 13X for Microsoft (MSFT). What’s more, Apple stock has a decent dividend yield of 2.3%. Going into the 2014, this may see an increase as well, especially considering Carl Icahn pressure.
Let’s face it, a value play in the mobile industry is tough to find. Just look at the outsized valuations of companies like Facebook (FB) and Twitter (TWTR). But one way to get a good value and ride the mobile wave is to buy AAPL stock.