There's little doubt Apple (AAPL -1.41%) has become one of the best-performing stocks over the past decade. It was also the first U.S. public company in history to achieve a market cap of $1 trillion. Yet for all the company's accolades, its coming decade may be even brighter, particularly on the dividend front.
In the Dividend Stock Hour that aired on Fool Live on Oct. 29, Fool.com contributor Danny Vena explains why Apple is his top dividend pick for the coming decades.
10 stocks we like better than Apple
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of November 20, 2020
Danny Vena: Might be surprised to learn that with a different focus on my investing process than what Jason has. Mine are going to be geared a little bit more toward growth, as I said earlier. I would say that one of my biggest dividend payers over the next 20 years is going to be Apple. I think Apple has nearly a billion devices out there. It has a loyal customer base. Warren Buffett is a big fan of Apple's dividend. In fact, he said, he owns about 5% of Apple. He'd love to own a 100% of it.
I think the fact that Apple has shown over the last decade, it's doubled the payout over the past decade. I think you could see that payout double, or even more than that over the coming decade just because Apple is generating so much cash. It's pivoting to the services part of the business.
I'm going to pull that Apple chart up here for just a minute. Because I think it's worth seeing just how strong Apple can be from here. Right now, Apple's payout ratio is only 24% of its income and about 20% of its cash. Apple is solid. If you look at what its dividend yield is right now, that dividend yield is low -- it's 0.5%. But why is that? Well, the reason for that is because over the past decade, Apple's stock has gone up almost a 1,000%.
Now, while I don't expect that kind of stock price appreciation over the coming decade, I do think the dividend is going to outpace the stock price appreciation over the coming year. I think Apple is probably my No. 1 pick for the next 20 years.
