Apple has toppled the $500-per-share mark for the first time, but the climb may be far from over. Since the January 24th announcement that Apple posted net income in excess of $13 billion and sales in excess of $46 billion, which is more than double, and up 73% from previous year, respectively, Apple's share has soared from around $420 to climb over $80, nearly 20% gain, in less than 3 weeks. Apple had been in contest with Exxon Mobil as the largest company, but with a market valuation of $465 billion, it is now the conspicuous spearhead.
What's next for Apple? While the release of iPad 3 will be highly anticipated in March, the prospect of dividends has certainly fueled the continual rise. Former CEO Steve Jobs was opposed to dividends, but that could begin to change in the shareholder meeting on February 23rd. A 2.5 dividend yield would translate currently to around $12.50 annual dividend a share. Given the current count of 932.37M stocks and 502.60 closing price, it would cost Apple 932.37M * 0.025 * 502.60 = around $11.7 billion. Even that would only be a fraction of the $17.5 Apple brought in Q4-2011 in cash flow from operations itself. That said, Apple has recently used much of its cash in investments. In the 52 weeks closing at end of Q3-2011, Apple actually saw negative net cash flows. However, with cash and short-term investments totaling over $30 billion as of end of Q4-2011, Apple would still have a solid current ratio of 1.24 if $11.7 billion of short-term investments were removed.
While the shareholder meeting is highly anticipated, analysts believe that the price will continue climbing. Yahoo Finance, through CNBC, quoted Shaw Wu, a Sterne Agee analyst, with a $550 price target on the shares. This meeting and the reception of new iPad 3 will ultimately dictate the direction of the world's most valuable company.
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