Apple a Solid Pick for TFSA Investors Amidst New Product Launches
Apple is being considered as a solid pick for a Tax-Free Savings Account (TFSA) due to its potential for dividend growth and share buybacks. Despite its single-digit per-year dividend raise, Apple's commitment to repurchasing shares at undervaluation makes it an attractive option.
The firm has been pouring billions of dollars into buying back shares over the years, which could lead to increased shareholder value. However, this year's iPhone 18 and foldable iPhone Duo models may not be enough to drive significant dividend growth.
Despite the high price point for the iPhone Duo, starting at $2,999.99 in Canada, analysts believe that it has all the makings of a hit product that could fuel a multi-year supercycle. With inflation normalized since COVID lockdowns and memory prices on the rise, consumers may be willing to absorb the cost.
Apple's 0.4% dividend yield is not high, but its share buybacks make it an attractive option for TFSA investors. The stock is currently trading at 36.1 times trailing price-to-earnings (P/E), making it a pricey investment. However, if the foldable device takes off, it could propel Apple's form factor into the mainstream.