Recently, Microsoft [MSFT] overtook Apple [AAPL] in market cap for the first time in eight years. On Nov. 26, 2018, Microsoft briefly clinched a market cap of $812.93B while Apple’s market cap at that time stood at $812.6B.
While Microsoft briefly held the title of the most valuable company in the United States, it is likely that the two companies will trade back and forth for this title, at least in the short term.
Apple overtook Microsoft in 2010
Apple first overtook Microsoft about eight years ago. It was described to be a watershed move, highlighting that “the most important technology product no longer sits on your desk but rather in your hand.”
In 2010, the Apple iPhone was just two years into its launch and was fast gaining traction in the smartphone market. The device, in fact, revolutionized the usage of mobile devices and even compelled mobile heavyweights such as Nokia [NOK] and Blackberry [BB] to exit markets.
The iPhone is still Apple’s flagship product and accounts for almost 60% of company sales. Driven by phenomenal growth, Apple was the first public company in the country to be valued at $1T earlier this year.
Slow iPhone demand
The global smartphone market is in a cycle of decline. Though Apple continues to outperform the global market, demand for its iPhone has been lower than estimated. Analysts have been concerned for some time over Apple’s slowing iPhone demand driven by supply chain reports.
Apple also stated that it would no longer publish device sales going forward, further adding fuel to fire. The tariff war between United and China might further amount to a short-term weakness for Apple shares.
Microsoft a top performing stock
Microsoft has been a top pick for investors in this extended bull run. Despite the upbeat momentum, Apple’s mind-boggling growth has dwarfed Microsoft’s spectacular returns.
Microsoft’s Satya Nadella was appointed the company’s CEO back in 2014, post which the company upped the ante on the development of cloud products and services. Microsoft overtook Google [GOOGL] in market value earlier this year and surpassed Amazon [AMZN] last month.
As seen below, Amazon overtook Microsoft in market cap early this year before Microsoft returned the favor.
Its diversified business portfolio provides more cushion for Microsoft in a downturn. For example, Microsoft’s sales from Windows, Xbox and Surface verticals accounts for 36% of total revenue. Compare this with Google where advertising accounts for 86% of sales.
Microsoft unsuccessfully tried to enter the smartphone space with the Windows phone. Its now trained its guns on high growth areas such as artificial intelligence, cloud, and cross-platform technologies.
Can Microsoft beat Apple to $1T?
We’ve seen that growth concerns for the iPhone coupled with macroeconomic uncertainty in terms of the tariff war will continue to weigh in on Apple’s stock price. Apple’s sales are expected to rise by 5.2% to $279.3B in 2019 and 4.2% to $291.14B in 2020.
Comparatively, Microsoft’s sales are expected to rise 13% in 2019 and 10.6% in 2020. A higher growth rate might benefit Microsoft’s share price especially when uncertainty looms large over Apple.
5 Epic Money Posts From 5 Epic Instagram Channels
Yes, we’re heading into the ninth inning of the lockdown, and yes, we’re ready to step outside and be real people again.
Still, Instagram has been—and still is—most people’s pastime. And we can’t exactly say it ain’t ours, either.
So because we like to share the stuff that helps you all make money (or at least think about it), we decided to put together five great posts from Instagram that will inspire you to do just that.
Make some money. Here goes.
This upstart channel is dope as it is, building its brand in just a few weeks and amassing over 100K followers in the process.
This post breaks down why Bob’s $3K salary > John’s $10K. (Pay attention.)
3 Simple Strategies You Can Use To Build Your Investment Portfolio
If you’re starting out with planning your investments, chalking out your goals and how you’d like to achieve them is incredibly important. You’ll need to understand what kind of assets you’d like to invest in–be it private equity or the tried and tested products like treasury bonds, ETFs and stocks–and invest right. Here are three key strategies to build your portfolio:
1. Building Wealth Is All About Thinking Rationally (And Smart)
Having the right mindset can play a huge role in how you build your investments. It’s simply not just about strategy. To ditch following the latest fad in the market, you need to be responsible and have a sense of social indifference–coupled with confidence and patience.
2. Invest Like A Cheapskate
If you’re pumping in $150,000 as investment, on which you incur 1% as fees, look out for ways through which you can cut them down.
If you were to cut costs by a little more than a half, that’s saving you at least $1,120 in fees every year. But that’s not it–when this saving is compounded every year, that 1% fee can tally up to a million (if saved, could win you your big ticket to becoming a millionaire)
3. The KISS (Keep It Simple, Silly) Rule
Funnily enough, most of us think investing your way through millions demands extensive knowledge of financial instruments or strategies. Surprisingly, it’s the simplest of assets that give investors their biggest wins. Many successful investors highlight their success to stocks, bonds and other popular alternative investments, patiently held over time.
(THROWBACK!) High-Dividend REITs: Are They A Safe Bet?
Investment in Real Estate Investment Trusts (or REIT’s) are ideal for investors who want a regular stream of income. REIT’s purchase real estate properties and lease them to clients (or tenants). This income generated is then paid to shareholders via dividends.
REIT’s are required to distribute at least 90% of net income to shareholders which means these firms have higher dividend yields compared to regular equity investments. But how many high dividend paying REIT’s are worth investing in? This article looks at REIT’s with high dividend yields and a market cap of approximately $1 billion.
CBL & Associates Properties
CBL & Associates Properties (or CBL) has a market cap of $915 million. This REIT has a dividend yield of 17.4% and pays annual dividends of $0.80 per share. CBL’s portfolio is primarily in regional shopping malls (Class B and Class C).
CBL is grappling with declining sales as revenue has fallen from $1.04 billion in 2015 to $1.02 billion in 2016 and $927 million in 2017. Revenue is estimated to decline to $852 million in 2018 and $835 million in 2019. There have been concerns over the high debt levels (over $4 billion) of CBL as well.
Further, company CEO Stephen Lebovitz also hinted at a possible dividend cut in the future. CBL reduced its dividend by 25% last year as well. CBL has stated that it is looking to reposition its portfolio and focus on redevelopment initiatives. However, investors will not be confident about investing in a stock that has declined from $20 per share in August 2013 to $4.65 in August 2018. The stock is trading 16% above the average analyst price target of $3.91.
Washington Prime Group
Washington Prime Group (or WPG) engages in the acquisition and development of retail properties and this REIT has a market cap of $1.5 billion. WPG has a dividend yield of 12.8% and pays annual dividends of $1 per share. The stock price has declined from close to $20 in May 2014 to the current price of $7.92 which is 6% higher than the analyst target price of $7.45. This year, WPG has however risen over 18%.
WPG is a mall owner with assets across Florida, the Mid-West and the East Coast. In this digital age when the number of people visiting malls has declined, WPG has also seen its revenue decline. Sales have fallen from $922 million in 2015 to $758 million in 2017 and are estimated to reach $724 million this year.
WPG’s funds from operation (or FFO) which is similar to earnings per share for stocks declined 8.4% in 2017, while occupancy reduced from 94% in 2016 to 93% last year. WPG might also have to cut dividends if sales continue to decline over the next few quarters.
Global Net Lease
Global Net Lease (or GNL) has a market cap of $1.5 billion and this REIT has a portfolio of commercial properties. GNL focuses on sale-leaseback transactions across the United States and Western Europe. GNL has over 300 properties with an average lease term of 8.6 years.
GNL’s client base includes FedEx, GSA, ING, and Finnair among others. While GNL’s revenue rose 21% year-over-year to $259 million in fiscal 2017, FFO per share declined 18%. GNL has a dividend yield of 10% and pays an annual dividend of $2.13 per share compared to its reported FFO of $2.10 per share last year.
GNL aims to acquire properties worth $293 million this year which will expand the company’s portfolio. GNL is estimated to post revenue of $283 million in 2018, $303 million in 2019 and $314 million in 2020. GNL is trading at $21.53 which is 11.5% lower compared to analyst average target estimates of $24.
Kimco Realty (KIM) has a market cap of $7.2 billion and is one the largest publicly traded REIT. This REIT owns close to 500 shopping centers in the United States with 83 million square feet of leasable property. Kimco has a dividend yield of 6.6% and pays an annual dividend of $1.12 per share.
According to this report from Suredividend.com. “Kimco’s property portfolio has enjoyed rising occupancy and rents over the past several years.” In the first quarter of 2018, Kimco’s FFP rose 5.4% driven by a rise in occupancy and rent. While occupancy rose 1 basis point to 96.1%, rental rates for new leases rose over 15%.
Kimco’s tenants include struggling retail companies such as Sears, JC Penny and Kmart all of whom might close a few stores. Kimco will need to look at acquisitions to drive future revenue. This stock has lost close to 6% in 2018 and is trading at $17.06 which is 1.3% lower than analyst projections.
Senior Housing Properties
Senior Housing Properties (SNH) is a healthcare REIT with a market cap of $4.5 billion and a dividend yield of 8.2%. This REIT owns property worth $8.5 billion and over 700 tenants. SNH shares have increased close to 30% since February this year and the stock is trading at $19.04 which is 4% below average analyst price target estimates of $18.25.
While SNH’s FFO per share fell 16% in 2017, performance has started to improve this year. SNH has managed to beat analyst earnings estimates considerably in the last two quarters. SNH has acquired properties worth over $300 million and sold assets of approximately $800 million since the start of 2017. The proceeds were used to pay off debt.
SNH revenue is estimated to rise 4.1% year-over-year to $1.12 billion in 2018 and 2.1% to $1.14 billion in 2019.
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