Apple rises 4,738% as risk trails Schlumberger over last decade

ChartMarch 20 (Bloomberg) -- Apple Inc. didn’t need the biggest price swings to post the best gain in the Standard & Poor’s 500 Index over the last decade.

The CHART OF THE DAY shows the iPad maker’s top return of 4,738 percent since 2002 is double the index’s next-highest gain after adjusting for volatility, according to data compiled by Bloomberg. Daily changes in Apple ranked 216th out of the 500 equities in the benchmark measure for U.S. equities, surpassed by companies such as grocery store operator Whole Foods Market Inc. and oil services provider Schlumberger Ltd., the data show.

Shares of the Cupertino, California-based technology provider climbed to a record Monday after it disclosed plans to pay a dividend and buy back $10 billion of stock. Investors had urged Apple to return money to shareholders as the company’s cash pile swelled amid surging demand for its products.

“Bears have continued to ask, ‘What’s next for Apple?’ and have significantly underestimated the growth and consistent execution,” said David Dillon, a San Francisco-based portfolio manager at HighMark Capital Management Inc., which oversees about $17 billion. “The dividend announcement could bring in a whole new class of income-oriented investors.”

Apple is trading at 17.1 times earnings in the last 12 months and 13.7 times profit in the next year, according to data compiled by Bloomberg. The ratio based on earnings in the last year is 6.2 percent higher than the multiple for technology companies in the S&P 500 and 57 percent below the company’s 10- year average valuation of 40.

“You can say it’s an over-loved stock, but the low valuation says otherwise,” Dillon said.

Cognizant Technology Solutions Corp., which gained 2,162 percent for the fifth highest return in the index on an absolute basis, had the second-biggest gain after subtracting volatility. Intuitive Surgical Inc. was third and Southwestern Energy Co. was fourth.

Bloomberg News

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