Apple Stock Tops $500; Is a Dividend Next?

Apple (Nasdaq: AAPL) stock keeps reaching new heights, crossing the $500 mark today for the first time in history. Now there are rumblings that the company may be on the brink of introducing a dividend.

Apple stock is up another 1.3% today after closing last week at $493.50. Today’s gains mean the stock is up 32% in the last two months, and 18% since reporting blowout earnings on January 24, and shares have rallied 38 trading days straight without a decent three day pullback.

Most analysts say the tech stock won’t stop here. According to The Wall Street Journal, 85% of brokers covering the stock say Apple shares are still below their price targets. Nearly half of them have set price targets above $600.

Trading at just 11.7 times estimated earnings for the next four quarters, Apple stock is still cheap. It has plenty of room to grow in the long term. The company is supposed to release its new iPad sometime this spring. The iPhone 5 is expected to hit stores in late summer. If its sales of the iPhone 5 are anything like they have been for the iPhone 4S – which was released in October – Apple’s earnings should continue to skyrocket.

Which is why a dividend could soon become a possibility. With the company already sitting on $100 billion in cash and more major cash-generating products in the works, some analysts are speculating that Apple may finally fork over some of that extra dough to its shareholders.

Some analysts have speculated that the topic of a dividend could come up as early as next week, at the company’s February 23 shareholder meeting. Abhey Lamba of Mizuho Securities predicted to The Wall Street Journal that Apple will “initiate a dividend and start buying back the stock over the next year.”

If that happens, Apple’s stock may vault high enough to make $500 a distant memory.

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