Long term Apple shareholders have seen their investment increase by 237% in the past five years, a rather splendid return, especially when set against the greater market turmoil created by illogical, idiotic, and nonsensical COVID lockdowns, mandates, and restrictions, profligate government deficient spending, war, etc.
During five years of share price growth, Apple achieved compound earnings per share (EPS) growth of 20% per year. This EPS growth is slower than the share price growth of 27% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. And that’s hardly shocking given the track record of growth.
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Apple’s TSR for the last 5 years was 253%, which exceeds the share price return mentioned earlier. And there’s no prize for guessing that the dividend payments largely explain the divergence!
MacDailyNews Take: As we wrote during an Apple stock dip back on October 26, 2016:
The world is full of fools and, therefore, profit potential abounds for the cognizant.
Apple shares that day closed at $26.86 (adjusted for splits and dividend and/or capital gain distributions).
Smart investors accumulate Apple shares, especially during dips.
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[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
