Apple may raise dividend soon

Apple has got free money! Well it is a bit exaggerated to say free money but it is almost free! Last week, Apple issued1.25 billion Swiss francs ($1.35 billion) in a two-part bond. The 875 million bond maturing in November 2024 will pay investors 0.281%. The 375 million 15-year bond will pay a 0.74% yield. Can you imagine to borrow money for 10 and 15 years with such low interest rates? It is almost free, right? So does Apple need money at the moment? Not at all. Apple is making around $8.3 million dollars profit per hour every single day and it has $60 Billion free cash flow. It has roughly $178 billion of cash with only $44 billion of debt. The big Apple just has too much cash in hands. So what on earth Apple needed to raise this amount of money, and in SFr? Well, if you are asked to borrow money for nearly free, would you like to take the money? That’s exactly why Apple issued this amount of bonds in Switzerland. It is always great to get free money! Given Apple has so much free cash and does not know how to use it, I bet Apple will soon significantly increase its dividend. How much is anyone’s guess. In addition, it will likely increase its stock buyback amount as well. Both of these are great for long-term investors as they increase the stock value substantially. Studies have demonstrated that companies that pay increasing dividends and buy back its own stocks are much better in the stock performance in comparison with S&P performance. This is another reason that Apple will continue to march higher, a lot higher from the current price. I bet Apple will reach $150 pretty soon and even $200 will not be out of reach. Buy Apple at any weakness.