The sad news of the passage of Apple (NASDAQ:AAPL) co-founder Steve Jobs put the spotlight on the tech giant’s future. Will Apple stock continue being the juggernaut it has been during the past decade, or will shares falter now that Steve Jobs is gone? That question will have to be answered with time; however, before Jobs left the Apple’s helm, he put one plan in place that’s likely to pay dividends for investors willing to look to the Far East.
In late August, Chinese telecom giant China Mobile (NYSE:CHL), the largest mobile wireless provider in the world with more than 600 million subscribers, confirmed that it was in talks with Apple to offer the iPhone on its specialized TD-SCDMA network. During a press conference following the carrier’s earnings announcement, China Mobile Chairman Wang Jianzhou noted that he had met with Steve Jobs to discuss bringing a customized version of the phone to the carrier. No deal was confirmed, but the smart money is betting that the iPhone will make its way to China via China Mobile at some point in 2012.
Click to EnlargeActually, the iPhone, along with its beefed-up tablet brother the iPad, already are available in China through the country’s second-largest mobile carrier, China Unicom (NYSE:CHU). Both devices have enjoyed wild success, and in the most recent Q2 update from Apple, CEO Tim Cook said, “Greater China saw iPhone sales up over 3x, about 200 — almost 250%. And this catapulted revenue for the first half or first fiscal half in Greater China to just under $5 billion, which is up almost 4x year-over-year.” There is no reason to believe that Apple’s growth in China will be anything but robust, and that bodes well for a new iPhone outlet via China Mobile.
Now, since I am all about buying stocks for dividends and high yield, if Apple paid a dividend, I would be all over it. I also would be partial to China Unicom based on the Apple connection if the stock had a reasonable dividend yield, but with a measly yield of about 0.5%, it doesn’t meet my requirements for dividend-oriented investors.
China Mobile has a dividend yield of 3.8%, so if your objective is getting a solid income stream from an Apple-related stock with tremendous growth potential, then CHL definitely is one to check out. On its own, China Mobile has impressive stats. The company has a market capitalization of $193 billion and is growing top-line revenues by about 9%, to $79 billion, as of the second quarter. Profit margins are running at 24%, and it has $51 billion in cash on hand with a payout ratio of only 37%. Those are great metrics by themselves, and really enough reasons to love CHL. But when you add in the Apple factor to the mix — well, you get dividends straight from China’s Apple tree.
Disclosure: Bryan Perry recommends China Mobile in his Cash Machine advisory service.
