Apple Inc. (AAPL) Finally Sees Its Value-Stock Destiny

Finally, at Cisco’s analyst day in September, Chambers announced a new — and much lower — revenue growth goal of 5%-7%, leading to annual earnings growth of 7%-9%. Despite these vastly lowered growth expectations, which have proved accurate so far, Cisco has rebounded by nearly 50% from its lows in the summer of 2011. Some of this can be attributed to the rising stock market, but it is also a result of moving from a growth investor base to a value investor base. Cisco has continued its long-standing share repurchase program, while instituting a dividend in 2011 at a yield just above 1% and growing the dividend aggressively; it now yields over 3%.

What does it mean?
So what does this all mean for Apple Inc. (NASDAQ:AAPL)? Hopefully it means that most of the pain for shareholders is over. Cisco stock finally regained traction when management admitted that it had gone from being a growth story to a great value stock. Apple now has a dividend yield similar to Cisco’s, and it now has a substantial share buyback program (also like Cisco). In short, Apple has embraced its new identity as a value stock. Moreover, Apple’s near-term growth opportunities should allow it to grow revenue significantly faster than Cisco’s 5%-7% clip. With Apple now pushing a solid case for value investors, I think shareholders will be very pleased about the stock’s performance going forward.

The article Apple Finally Embraces Its Value Stock Destiny originally appeared on Fool.com and is written by Adam Levine-Weinberg.

Fool contributor Adam Levine-Weinberg owns shares of Apple. The Motley Fool recommends Apple and Cisco Systems and owns shares of Apple.

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