The #1 Stock to Own Right NowJune 2017 edition

The stock featured in today’s special report is one of the newest additions to an elite group of companies with remarkable histories of paying shareholders through both good times and bad.

These special stocks are called Dividend Growth Stocks… and for many of the analysts we follow, they’re the consensus “investment of choice” for anyone looking to secure a lifetime of steadily-rising dividend payments.

Put simply, a dividend growth stock is a company with a proven track record of raising its dividend year after year.

These companies typically dominate their industry, realize steady profits, and generate massive amounts of free cash flow.

And perhaps best of all, they pay their shareholders a generous amount of that cash in the form of a dividend that goes up every year (often rising faster than the rate of inflation).

The beauty of owning a stock like this is that no matter what happens to its share price, as long as the company continues to grow its dividend, we stand to collect larger and larger payouts each year.

With this in mind, we’ve sifted through the recommendations of some of our favorite analysts and singled out our favorite dividend growth stock to own right now.

For this report, we’ve teamed up with Brian Bollinger – a Certified Public Accountant (CPA) and founder of Simply Safe Dividends.

In short, we’ve asked Brian to analyze the stock featured in this report on the merits of its 1) dividend safety 2) dividend growth potential and 3) key risks.

Brian’s analysis takes into account more than a dozen fundamental factors that influence a company’s ability to continue paying dividends, such as:

  • Earnings and free cash flow payout ratios
  • Debt levels and coverage ratios
  • Recession performance
  • Dividend longevity
  • Industry cyclicality
  • Free cash flow generation
  • Business volatility
  • Near-term sales and earnings growth
  • Return on invested capital

As you’re about to see, the following stock appears to be one of the safest dividend-payers AND growers on the planet.

It could easily be a core holding in a solid dividend-generating portfolio that rewards you for years (if not decades) to come.

Here at Daily Trade Alert, it’s our firm belief you will do well if you:

1) buy this stock at a reasonable price (fair value or better)…
2) hold it for the long-haul (to allow for the power of compounding, and…
3) reinvest its dividends along the way (either selectively or automatically)

With this in mind, we’re pleased to introduce you to the March 2017 edition of what we think is the #1 stock to own right now…

The #1 Stock to Own Right Now: Apple (AAPL)
Apple needs no introduction.

The stock has already minted many millionaires over the years, and here at Daily Trade Alert, we think it will continue to make money for long-term shareholders going forward… courtesy of its fast-growing dividend.

The company is about as high quality as it gets: It’s “AA+”-rated from S&P, it has spectacular profitability, a massive cash pile (more than the U.S. Treasury!) and an incredible balance sheet.

Thanks to its premium brand, Apple has unmatched pricing power that regularly delivers gross margins in excess of 35% (unheard of in its two main markets, PCs and smartphones).

As a result, the company is gushing free cash flow and is growing its dividend like crazy.

CaptureSource: Simply Safe Dividends

As you’re about to see, not only does Apple offer one of the safest dividends in the world, but its dividend growth potential going forward is nothing short of outstanding — making it an ideal core holding for long-term income investors.

Perhaps this is why legendary investor Warren Buffett is betting tens of billions of dollars on Apple…

Buffett Bought Another 72 Million Shares of Apple
According to the latest SEC filings, investing legend Warren Buffett recently bought an additional 72 million shares of Apple.

All told, Buffett’s Berkshire Hathaway now owns 129.4 million shares.

And those shares will almost immediately pay off: Berkshire Hathaway stands to collect at least $81.5 million in Apple dividends within the next three months alone.

With this in mind, we’ve asked Brian Bollinger of Simply Safe Dividends to analyze the safety and growth potential of Apple’s dividend, as well as any key risks investors should be aware of…

Apple (AAPL) – Dividend Analysis and Key Risks
Simply Safe Dividends rates a company’s dividend safety and growth potential by reviewing its key financial statements and ratios. Dividend scores range from 0 to 100, with scores below 20 considered weak, 50 considered average, and 80 or higher considered excellent.

Dividend Safety Analysis
Apple’s Dividend Safety Score is 95, which indicates that the dividend is not only much safer than the average dividend-paying stock in the market, but actually one of the safest overall.

Apple’s excellent Dividend Safety Score is driven by the company’s relatively low payout ratios, healthy balance sheet, strong business economics, and low industry cyclicality. Apple’s payout ratio over the last year is about 27%, which gives the company a large cushion to continue paying dividends. Investors can learn more about how to use payout ratios here.

Apple’s balance sheet provides even more assurance with over $15 billion in cash and more than $240 billion of marketable securities compared to total book debt of about $89 billion. Apple can cover its current annual dividend payments for more than 12 years with just the net cash and marketable securities on hand!

As long as Apple maintains its excellent iPhone margins and protects its brand, the company’s dividend should be very safe for many years to come.

Dividend Growth Analysis
Apple’s Dividend Growth Score is 92, which indicates excellent future dividend growth potential.

Apple initiated a quarterly dividend of 38 cents per share in 2012 and has since increased its dividend by 66%, raising it to 63 cents today. The last increase was an 11% boost earlier this year.

CaptureWithin reason, Apple could probably grow its dividend as fast as it wants to. The combination of a relatively low payout ratio, an extraordinarily strong balance sheet, and end markets that should continue to grow can fuel dividend growth for many years to come.

In reality, Apple is likely to keep up the roughly 10% per year dividend growth rate for some time. The company still views itself as a growth company and is willing to invest billions of dollars into high risk, but high reward business ventures in huge addressable markets (self-driving cars, payments, etc).

Key Risks

The iPhone drives over 60% of Apple’s overall revenue and has fueled the company’s high growth over the past decade. Apple’s strong brand, superior user experience, and bargaining power with suppliers have allowed it to capture high margins on its phones.

However, with the smartphone market becoming increasingly saturated and phone differentiation harder to come by, Apple could struggle to find its next major growth driver. There is also a chance that iPhone margins come under pressure as consumer preferences and buying habits evolve. Many conservative dividend investors choose to avoid the technology sector because of its fast pace of change.

Daily Trade Alert’s Suggested Action to Take: If you’re a long-term income investor looking to cash in on what appears to be one of the safest dividend-payers AND growers on the planet, then consider building a core position in Apple (AAPL) today. Right now could be the perfect time to buy shares.

Greg Patrick, Co-Founder

P.S. Not all of the analysts we follow are in agreement on Apple’s bullish outlook. In fact, one of them thinks most investors are going to get caught by surprise with underwhelming performance. Another warns that the stock has moved too far too fast lately and could pull back 10% over the next year.