5 Reasons to Buy Apple Stock and How To Do It| North Loop Official Blog
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14 Aug 2020

5 Reasons to Buy Apple Stock and How To Do It

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Apple Inc. is one of the most valuable publicly traded companies in the world and considered one of the big tech companies alongside Amazon, Google, Microsoft and Facebook. With a market capitalization around $1.9 trillion, it has gained a monumental presence in the tech industry.

Ever since the advent of the first iPod, the company has been pushing the boundaries and revolutionizing technology as we know it. Apple Inc. creates an impact on customers by providing them with the tools to do what they want, depending on their interests and pursuits.

The ease of use, superior design, high quality, and unparalleled customer service offered by them influences millions of people worldwide to buy their products. With around 185.2 million smartphones getting shipped in AY 2020-21 and revenue of $260.2 billion, the popularity of its devices continues to grow, and customers are willing to pay premium prices to join the Apple ecosystem.

Let us now discuss the five main reasons why you should buy Apple stock –

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1. Apple Inc. is cash-rich –

Apple stands out as a tech company with around $194 billion in cash at the end of June 2020. Apple stock dividend and annual pay-out continue to rise with its quarterly dividend more than doubling in the past years to 82 cents per share today.

During the current market situation, having a healthy balance sheet and profitability becomes of paramount importance, and Apple boasts of that as it generates a substantial free cash flow after all operating expenses and business reinvestments.

Over the years, it has spent hundreds of billions on share buybacks and has recently announced a 4-for-1 stock split to make the stock more accessible to a broader base of investors like you. That means that after the split, you can own four times as many shares worth around one-quarter the pre-split Apple stock price.

Experts also believe that most stock-splits indicate an extended period of strong performance by a company and add to its existing upward momentum, and that might be the case for Apple as well.

2. Growth of service segment –

The tech giants services segment has become its second-largest segment after iPhones and includes revenue from digital sales and subscriptions in popular and high-margin software offers like iTunes and the App store as well as those from advertising and other services like AppleTV+, iCloud, AppleCare, licensing and others.

Apple’s services revenue has risen 17% year over year to around $13.16 billion and continues to grow as its installed base of active devices has reached an all-time high. Moreover, with the current global situation and more people spending time at home, the revenue from its services segment is expected to climb further.

3. Growth of revenue from wearables –

Along with the growth of Apple’s devices and services, there has been a surge in revenue from its wearables segment. The innovations brought about in the Apple watch are one too many, and it is transforming the world of smart-watches.

After the ECG feature became a great hit in the Apple watch series 4, sources are claiming that the Apple watch series 6 might come with a blood oxygen level sensor that can create a massive impact worldwide. It can also lead to a high potential for a double-digit year over year sales growth.

Moreover, the revenue from this segment that includes the iPods, Beats products, and the Apple watch has increased 44% in fiscal Q1.

4. History of Apple stock –

One more reason to invest in Apple stock right now is its history of past performance before a new product launch. According to analysts, the period before the launch of a new Apple product has always seen low volatility and generated substantial outperformance.

Therefore, investing in the stock before the upcoming launch of the iPhone 12 and Apple Glass (its mixed-reality smart glasses) would be a sound financial move as Apple stock price is likely to soar after that.

5. Network-effect –

When seeking stocks to invest in, it is natural for you to look for those that are meant to thrive for years to come and Apple stocks give you that long-term competitive advantage.

Apple has built a network effect wherein it can deploy new software and services to billions of active iPhone users and other devices to create a continual cycle that ensures that the company continues to prosper.

Ensuring that certain features are available only when iPhone users are communicating with each other, it has strengthened this network effect and also created an immaculate integration between its devices which makes it difficult for customers to switch to other brands or products.

How to trade Apple stock online?

Choose a good online investment platform –

Choose a platform that connects you to the major stock markets such as the NASDAQ and NYSE (New York Stock Exchange). Apple stocks are traded on the NASDAQ stock exchange, and the company is a member of three indices: the NASDAQ, DJIA and S&P 500.

If you choose an online platform like North Loop, you can easily open an account and begin investing on your own or even get the help of a skilled financial advisor. Moreover, it has a user-friendly interface and provides quality customer service that is active 24*7.

Open your brokerage account –

To buy Apple stock online, you need to open a brokerage account. There can be a minimum deposit requirement to open a brokerage account on some platforms, and the amount varies between $20 to $10,000 or more.

Fund your investment account –

After creating a brokerage account, you should decide about how much you want to invest in Apple, based on your financial goals and requirements. Moreover, to begin investing, you have to fund the brokerage account that you have opened, and that can be done through various methods like bank transfers or credit/debit cards.

Buy and review share positions regularly -

Find Apple stock on your investment platform by searching for its name or ticker symbol that is AAPL. Once you buy the stock, you should review both your share positions as well as the business performance regularly by looking at quarterly or yearly reports to ensure that they are in line with your long-term financial goals.

The above information is for general purposes only. It is always recommended to do your own research before investing.

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.