When considering investing in a company, it's important to look beyond your favorite product or the CEO’s TedTalk.
While those things can be good indicators of a strong culture and innovative technology, diving beyond the surface can help you decide whether buying stock in a company is a smart money move .
Here are some myths about Apple stock you should know.
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1. Apple shares only go up
Historically, Apple’s stock has gone up over its lifetime, but there have been plenty of instances when it has dropped.
If you compare the stock price growth over the last five years to the last few months, you can see that the growth is slowing and even backsliding during some periods.
While the stock is currently up 23%, in March 2024, it was down about 12%. While it’s normal for stock values to fluctuate, the exponential growth isn’t currently booming like it once was.
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2. Apple has saturated the smartphone market
It seems like everyone has an iPhone in the United States. Apple has almost 60% of the domestic market share. The closest competitor is Samsung, which only has a 24% piece of the mobile phone pie.
However, on a global scale, Apple only has 15.8% of the global market — which seems like small potatoes. If you were worried Apple has run out of people to sell iPhones, you shouldn't be.
3. Apple is out of good ideas
Charles H. Duell was the Commissioner of the U.S. Patent Office in 1899 and is famously quoted as saying, "Everything that can be invented has been invented."
It's hard to think beyond past iconic products like the iPod, iPad, and iPhone, but Apple's research and development department would beg to differ. In 2023, the company spent almost $30 billion on developing ideas, products, and services.
While not all those potential ideas will be moneymakers, there are likely several promising products already in the pipeline.
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4. Apple doesn’t pay enough in dividends
Apple paid its first dividend in April 1987 at the rate of $0.06 per share. The most recent dividend, paid out in August 2024, was $0.25 per share. Some critics believe Apple should pay more in dividends given its enormous cash pile.
While you won’t get rich on the dividend per share, Apple paid out more than a whopping $15 billion in dividends during 2023.
5. Apple’s iPhone sales are as strong as ever
Apple released the original iPhone in 2007. Since then, it's sold more than 1.5 billion smartphones.
Sales have never stopped, but that doesn’t mean sales have never dropped. There have been several quarters when sales have dropped below the previous year’s period.
Even though sales fluctuate, Apple’s iPhone remains its flagship product, responsible for 50% of the company's profits each year.
6. Apple TV is a flop
While Apple TV doesn’t rank in the top three of subscribers or subscriber loyalty, all's not lost for the streaming platform.
Apple TV spent less than half of what Netflix did in 2022 — yet it landed 54 Emmy nominations, including Apple's original "Ted Lasso" being the most nominated comedy.
Reddit users argue that Apple TV’s original content is far superior to Netflix’s original content, citing that Netflix churns out more volume of content, but the quality feels lacking compared to Apple.
They feel like Apple TV spends its money on high-quality entertainment, rather than churn and burn style, just constantly creating content to say it has the most.
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7. Apple stock is too expensive
Apple’s current P/E ratio is 34.9, and the average stock price for a share has been about $180 over the last year.
This isn’t affordable for everyone, but that cost doesn’t even come close to the highest-priced stock currently traded on the New York Stock Exchange (Berkshire Hathaway’s Class A at about $600,000 per share).
However, thanks to investment apps like Robinhood and Stash , you can buy fractional shares of many stocks. Fractional shares are a percentage of a whole share.
You choose how much you want to invest based on the dollar amount. For example, if you wanted to invest $90 in Apple stock, you could own around 50% of a single share.
Bottom line
Even with the price dips over the last year, Apple shares have more than tripled in the last five years.
Investing is meant to be a long game, and Apple’s history is proof that holding onto market leaders for years is likely to your advantage when it comes to building wealth .
Money tips that can work for everyone
No matter what your bank account balance is, there's always an opportunity to optimize and improve your finances. Here's a quick checklist of things you can look at today.
Focus on paying off your debt . Debt can hold you back from making progress with your overall financial well-being. Aside from cutting expenses, there are tools that can help you pay off debt faster like balance transfer credit cards and debt counseling.
Earning extra income can give you breathing room. If finances are tight, earning some extra money to supplement your income can make a huge difference. A new job is one option to consider, but if you're not ready to make a big change or already retired, a part-time side job could be a better choice.
Cut your expenses. It sounds painful and so not fun, but it doesn't have to be. Take a look at your biggest expenses because that's where you'll probably find the biggest savings. For example, auto insurance rates have been soaring so shopping around for a new insurance company can be the fastest way to cut your bill. Also, look for ways to cut your grocery bill (despite rising inflation).
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