We sold Apple!
Apple (NASDAQ: AAPL) has been flat for several months now and they’re currently paying a dividend of only 1.98%. We don’t usually hold stocks that pay less than 3.5% so it was time to sell. We bought them in April, 2013 for $61.40 (adjusted before a 7:1 split) because they were undervalued at that time. We happily accepted the less than stellar dividend because the share price was appreciating nicely. They’ve given up some ground lately and don’t seem to be recovering so it was time to take our profit. We sold at $107.50 to realize a return of 75% – not bad for 33 months! We’re confident their share price will improve again but in the meantime we’d like a better dividend. Thanks for the ride Apple!
How low would Apple have to go for you to consider buying again? Or would you not buy unless the dividend is raised?
Hi Suzanne.
Great question! Apple’s current quarterly dividend is $0.52/share, or 1.98%. Generally, our low limit for a dividend rate is 3.5%, so in order for Apple to be back on our radar the share price would have to drop to about $59. Back in April, 2013 when we bought them, they were so under-valued that we were OK with the less-than-great dividend rate and were happy to ride the price up as they recovered. Our complete system for choosing a stock will be described in upcoming blog posts so I hope you’ll keep reading.
Thanks for your question!
An incredible ride indeed. Congrats on your buy and sell of AAPL. I have to admit that this is the first AAPL sell I have ever read among our dividend blogging community. I know many are sticking with AAPL even though it has performed less inspiring lately. Thanks for sharing.
We’re certain the share price will continue to gain ground too but our focus is dividend income so, in the meantime, we’ve taken our profit to purchase stocks that have been beaten down and offer a better return.
Thanks for writing.