On December 28, I initiated a position in Apple Inc. (NASDAQ:AAPL). I purchased 12 shares of AAPL for $116.87 each, with a trading cost of $6.95 for a total investment of $1,409.39 USD.
Interestingly enough, this was my one and only U.S. stock purchase for the year of 2016. I converted a bit more of my CAD to USD at the same time because I need some more geographic diversification to my portfolio, as well as the fact that the U.S. market has much larger corporations which address a niche simply not available for purchase through the Toronto Exchange.
Apple – the lowest yielding stock in the portfolio
Apple Inc. pays an annual dividend of $2.28 USD, which amounts to a 1.95% yield at my purchase price. This is the lowest yielding stock I own in my portfolio now, with W. W. Grainger coming in at a close second with a current yield of 2.11%. I believe AAPL has definite room for growth, as well as a bright future in dividend growth.
With the gigantic wad of overseas cash to the tune of $220 billion, and Donald Trump’s desire for a tax repatriation holiday, this money could prove very beneficial to the corporation. It could be used for investment, acquisitions, R & D, share buybacks, dividend growth, and special dividends. The sheer amount of cash here could buy out many companies which exist around the world.
Tha tax repatriation holiday, in addition to the corporate tax reform, could see AAPL fly sky high. This is my belief, at least. I wanted some exposure to the Technology sector, and compared AAPL to stocks such as IBM, CSCO, MSFT, and QCOM.
AAPL came out as my favourite. CSCO would have been a very good choice as well, but I see them as having a bit more risk to competition, and would think them a good choice only if the tax repatriation was a sure thing as they also have a large amount of cash overseas. Second to AAPL, I really like Microsoft (MSFT) but am unsure whether to initiate at it’s current valuation and currently am just watching the stock.
Dividend Income upgraded by 1.10%
My new investment in Apple Inc. adds $27.36 USD to my annual dividend income, or $2.28 averaged per month. AAPL has increased their dividend consecutively for 4 years since it was reinstated in 2012 after being cut in 1995. The corporation maintains a very conservative payout ratio of 26.68%, and shouldn’t have any problem increasing it for years to come.
|Annual Dividend Income||$2,472.28||$27.36||
|Monthly Dividend Income||$206.02||$2.28||
Keep in mind. When calculating my annual / monthly dividend income, I use a 1 : 1 ratio for converting USD to CAD to keep it simple (it also keeps things even more conservative).