Each month, Neil Macneale adds one new stock to his model portfolio, chosen exclusively from among the companies that have announced stock splits. Here's the latest from his 2-for-1 Stock Split Newsletter.
Among companies announcing splits, three were worthy of consideration: Apple (AAPL), Alliance Resource Partners (ARLP), and Domtar Corp. (UFS).
Alliance Resource is a coal mining company headquartered in Oklahoma and operating in Illinois and Appalachia. Most of the numbers are as good as Apple’s except debt is a lot higher. There are few companies—ARLP included—as profitable as Apple.
Domtar Corp., a Canadian paper company, was also scored highly by our ranking formula. For both ARLP and UFS, strong candidates in many respects, the competition from Apple was just too much to overcome.
Thus, despite strong competition from other good candidates, Apple did rise to the top of the list to become our pick for this month’s addition to the 2-for-1 portfolio.
Apple makes fabulous stuff. I’m writing this column on my Apple laptop. There are five other various Apple products scattered around my house, and that’s not counting the several obsolete Apple Macintosh computers stored in my attic.
Apple has the largest market cap of any company in the world, yet it remains nimble and it’s still incredibly profitable.
In addition to its great story, AAPL's numbers are also impressive. A very reasonable 14.2 PE, lower than market average volatility, a 2.2% dividend—what’s not to like?
Naysayers declare that Apple’s fire went out when Steve Jobs died. While the creative spark may not be quite as bright, this company will still be making lots of money for years to come. I’ll be very pleased to have Apple in the 2-for-1 portfolio.
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