iPad rumors point to big year for Apple
iPad rumors and a possible dividend have investment analysts excited. But should the vague iPad rumors get consumers excited, too?
Strong Apple products in the pipeline — and a possible dividend — led one “Fast Money” analyst to predict the company had a lot more upside in 2012.
“I definitely think a dividend is going to happen in calendar ’12,” ISI analyst Brian Marshall said Tuesday, adding that most investors don’t expect one.
Apple last paid a cash dividend on its common stock in December 1995.
“They could do a dividend of, say, 250 basis point-yield and only pay out 20, 25 percent of their free cash flow,” he said. “They’ve got tremendous flexibility here, obviously, and we think that would drive an incremental $4 billion of buying power to the stock, which is essentially the equivalent of a Top 10 holder. We think a dividend would be a material catalyst for the stock.”
Shares of Apple traded upward of $409 midday, up more than 1 percent.
“They still have tremendous opportunity to grow,” he said.
Marshall said the Apple TV will likely be a standalone flatscreen television set with an Apple interface, or “the first product to seamlessly integrate the home office and the living room.”
Trader Brian Kelly liked it.
“The trade is to buy,” he said. “There was no hot stock or hot toy this year during the holiday season. It was the iPad, it was the iPhone, it was the (iPod Touch). They have it. People line up at the stores to buy their product. You keep buying it.”