Apple will Pay a Dividend to its Shareholders

Apple (AAPL) has become the most valuable company in the world. It will start paying a dividend of $2.65 per share, each quarter, starting July 1. The yield will be about 1.8%, which is lower than dividend yields of Microsoft (MSFT) and Hewlett Packard (HPQ). Dividends are a nice way for shareholders to get some extra money out of an investment, but the dividend numbers are dwarfed by the percentage rise of the Apple stock. Apple's shares have rocketed upwards an amazing 45% this year. The 52 week range for Apple has been between $310 and $609, and the current price is $596. Ten years ago it was $12 per share. Five years ago it was $92. Owning this stock is a no-brainer, but at $600 per share, how many people will go and buy 10 shares? That scares a lot of people away. Microsoft seems more attainable for the masses, at $32 per share. I wonder if Apple would consider a stock split?

Earlier today, Apple's stock dropped 9% and the trading was stopped due to volatility circuit breaker regulations. It looks like the wild swing was due to a computerized trading error that affected stocks with symbols between A through BF. The BATS exchange issued the trades and they blamed it on a software error. More and more stock trades these days are executed via computer programs, which use logarithms to track the most minute moves in stock prices.

The key to Apple's success over the past 5 years or so have been its innovations, like the i-pod, i-pad and i-phone. But, with Steve Jobs gone, one has to wonder what else they have up their sleeve as far as new ideas.

* Some information from cnbc.com

Stocks to Hold on to Forever, and the Lessons of Toyota

A solid, dividend paying stock can be held for a long time, forever if you so desire. Super investor Warren Buffett has a portfolio that includes blue chip investments like Coca Cola, Exxon Mobil, Wal Mart, IBM and Intel. But, the stock market is unpredictable, and even a company that seems rock solid can have problems. Years ago, people saw GM and Chrysler as forever stocks, but they saw rough times and had to be bailed out. About five years ago I figured that Toyota (TM) would be a wise investment. The stock was over $100 per share, the balance sheet looked good, and it paid a decent dividend. Then came the recalls and the tarnished reputation of a company known for selling quality, worry-free vehicles. The company experienced supply chain challenges in the wake of Japan's typhoon. The stock is now at about $67 per share, about half the price at which I purchased it. But, Toyota has had ups and downs in the past, and I feel that things will turn around for the company. It is a good investment over the long term. Some would probably say that now is a time to buy, when it is low. It might be. Stock investing involves risk, and without a crystal ball, who knows what the future will hold. Buy low, sell high is the cardinal rule of investing, and if there is hope that a turnaround will happen, it's best to ride out the storm. Buy high, sell low would be a mistake. But, some may say if only a stop loss order was executed, the loss would not occur. I can see that argument, but on the other hand, a loss (or a gain) does not happen until a security is sold. The 52 week range for Toyota is between 60 and 93 dollars per share. So, at $68, it is closer to its bottom than its top. The dividend yield is still quite good, at 1.4%. But, this is down from its 5 year dividend average yield of 1.8%. Analysts on Yahoo finance rate it at a 2.7, which is neither a buy nor a sell recommendation. With the uncertainty in the European markets, things are unpredictable now for investors. When markets overseas hiccup, US markets do too. It's truly a global economy.