With Apple’s stock down 10% in August, it’s time to buy shares in the world’s most valuable company, maker of Macs, iPad, iPhones, Apple Watches, and purveyor of Apple TV+, Apple Card, Apple Arcade, iCloud storage, AppleCare, and much more.
Daniel Sparks for The Motley Fool:
While it always makes sense to have some cash, cash equivalents, and lower-risk investments in a portfolio, this may not be the time to double down on cash, despite the attractive yields in T-bills. Indeed, August’s decline has already surfaced some great opportunities. Take Apple stock, for instance. The iPhone maker’s shares have pulled back 10%…
Flipping the price-to-earnings metric upside down, you’ll get earnings yield. Doing this quickly puts into perspective why stocks generally outperform T-bills over the long haul. Apple’s earnings yield, which can be found by taking the company’s trailing-12-month earnings per share of $5.98 divided by the current stock price of $174.49, is 3.4%. While this earnings yield is lower than the 5%-plus rates available in treasuries, there’s a critical difference in this earnings yield relative to T-bill yields: Apple’s business is a going concern, so it will generate earnings for decades. In addition, it’s a going concern likely to grow over time…
On average, analysts expect Apple’s earnings per share in just four years to be about 50% higher than they are today. This is the power of compounding.
MacDailyNews Take: Owning and accumulating Apple stock has been a surefire way to turn relatively nothing into something rather significant for many, many years now. Sure, it’s fun – and can make you a bit more if done well – to try to time your buying on the dips, but a regular schedule of simply buying and adding to a growing stake of AAPL shares can clearly benefit investors as well.
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