Like it or not, the stock market is full of superstition. Such beliefs often give rise to popular sayings that investors know and love such as "sell in May and go away," among many others.
The broader market has been weak today following news that the small European nation of Cyprus will need a bailout. Domestic markets opened up well in red territory this morning as investors moved away from risky assets like equities. Where was Apple amid the macro turmoil? Enjoying gains of over 1% by mid-morning, thanks to investor superstition.
Tomorrow, it will be exactly one year since Apple announced the reinitiation of its dividend alongside a share repurchase program. Since most companies tend to stick to annual schedules when it comes to dividend payouts, investors are hoping for some news tomorrow on what Apple plans to do with all that cash.
It's entirely reasonable to think a dividend-related announcement is imminent, and exactly one year just has a nice ring to it. However, it's not common for companies to make announcements on the exact same date each year, which is why some of the optimism today is a little superstitious.
According to a Bloomberg poll, the average estimate from six Street analysts is for Apple to boost its dividend by 56%. That would translate into $4.14 per share quarterly, up from the current quarterly payout of $2.65 per share. Such a payout would also add up to $15.7 billion annually for Apple, while it currently gives back roughly $10 billion per year in dividends. At that rate, Apple would boast a dividend yield of 3.7%, a healthy income stream that value investors could appreciate, and one that would put its payout higher than 86% of the dividend payers in the S&P 500.
I'm on record saying that Apple has no choice but to increase its dividend and that the time is right. However, I'm not too concerned about the exact date Apple announces the boost -- so long as it announces it someday soon.
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The article 1 Superstitious Reason Apple Rallied Despite Cyprus Fears originally appeared on Fool.com.
Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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