Blue chip companies are known to be the main attractors of investors with large sums of capital at their disposal. And there is a reason for it, these companies are known for their stability and growth, and they also pay dividends which is very appealing to investors. Building a steady stream of passive income investing in dividend-paying blue-chip companies may be very convenient. In this guide, we are going to discuss if Apple stock is worth investing in and what the main pros and cons of its stock are.
Apple - the stock with one of the biggest gains
Apple stock is one of the biggest stock gainers in the history of stock markets. Although it is just in fourth place, it is still a feat for any stock to achieve this milestone. Apple stock even eclipses companies like Volkswagen and Berkshire Hathaway. Apple is a bestseller and offers products targeting the premium market sector with its iPhones and MacBooks.
The company is known for its stable release of new iPhones every year, and its phones are always a bestseller. Because of this nature, it is very unlikely that Apple stock will experience a significant fall in price. Its stock is in good shape according to these indicators also. In the last 10 years, the company has shown the best ROE results as its return on investment was only growing.
This means investors are generating growing revenue from their invested money in Apple stocks. A similar situation is with EPS or Earnings per share as it is also growing in recent years, promising almost guaranteed returns if enough money is invested in Apple stocks.
Dividend yields are not as high as one would expect with Apple, but understandably, companies with this stability and trustworthiness have a lower dividend payout of 0.54%. Low risks and low rewards with Apple stock in this case. All these and other fundamental indicators of Apple are in healthy shape, and the stock is worth considering for investors. But since Apple pays lower dividends, it may be a good idea to diversify your portfolio and include some high-risk and high rewards stocks too.
Apple savings account - The best way to save money?
There is good news for Apple investors and users. The company launched a new savings account that has attracted over 1 billion Dollars in 4 days. Where Apple stock falls short on dividend payouts, the savings account promises an eye-catching 4.15% annual return which is huge. With these numbers, it is possible to save Dollars and receive considerable returns as a passive income.
The only caveat is that this account is not available in some countries and requires to have an Apple credit card which may not be accessible for many investors outside of the USA. While banks offer nearly 0 annual returns on deposits, this offering from Apple is super attractive, and the allocated 1 billion Dollars in just four days shows how people are willing to use Apple's savings account as one of the ways to generate passive income.
The company is on par with some major US banks and maybe even safer to save money with Apple than with any average US bank.
Apple technical analysis
As we can see almost all of the fundamentals are suggesting the Apple stock is a strong buy, but what do the actual price charts have to say? Let’s dive deep into technical analysis and see the medium-term and long-term stock performance of Apple. Technical analysis is a cornerstone of stock trading and it is one of the most appropriate steps to define entry points for buying the stock.
There is a strong uptrend going on now on Apple charts. This is in line with the fundamentals we have discussed earlier and is a good sign to watch closely and find best buy entry points on Apple charts. The nearest resistance zone is located at 176 zones. Support and resistance zones are key levels, and underestimating them may cost a lot of money.
So, the best course of action would be to wait to see what the price does, as it is near that level. And then, when the price tests the zone and breaks above it, it would be a good setup for buying with a stop loss slightly below the 176 zone.
Key Findings on Apple Stock
As we can see, the fundamentals are suggesting that Apple stock is a good buy as the company constantly introduces new generations of MacBooks and iPhones. The recently launched savings account promises more passive annual returns than any US bank right now, making it a very attractive option for savings.
Fundamental indicators like ROE and EPS are also steadily growing, and as a result, we have a strong uptrend on Apple stock charts. But the technical suggests waiting for the 176 zone and if the price breaks out of that zone it may be the exact time to buy the stock. Stop loss would be placed slightly below the 176 price level minimizing the potential risk if the price fails to maintain an uptrend.
But since the fundamentals are bullish and charts are showing an uptrend, now may be the best time to invest in Apple stocks.