Apple Appeal

Apple (Nasdaq: AAPL) recently reported its third-quarter results, in which revenue popped 17 percent year over year (marking four consecutive quarters of double-digit year-over-year growth) and earnings soared 40 percent higher. Apple has been financially dependent on its iPhone, but it is wisely expanding its revenue in other areas. Its Services segment (which includes Apple Music, the App Store and Apple Pay) is a rising star, with its revenue up by 31 percent in the most recent quarter to $9.5 billion, representing 18 percent of the company’s top line. Clearly, Apple not only knows how to sell devices to its customers, but it can also convince them to spend more money in the company’s ecosystem through its ever-increasing menu of services. The company’s dividend yield was recently at 1.4 percent, and dividend investors should consider that Apple has a very low payout ratio of about 24 percent, meaning that the company has plenty of room to increase that payout. Apple is committed to its shareholders, having announced a $100 billion share repurchase program in the second quarter of 2018. Whether you’re looking for a company with earnings, cash on the balance sheet or a wide competitive moat, Apple fits the bill. (The Motley Fool has recommended Apple and owns shares of it as well as the following options on it: long January 2020 $150 calls and short January 2020 $155 calls.)