Lost in the talk of Apple's (AAPL 1.22%) new phone iterations, payment service, and smartwatch lies an unappreciated fact: Apple is a strong income investment. And while Apple fans and investors continue to look at Apple as a growth investment, clamoring for the next big thing, the big story since Tim Cook has taken the reins has been its shareholder-friendly capital allocation policies. Here are three reasons Apple is a top dividend stock.

Apple's huge cash hoard
Apple's massive $164 billion cash hoard is the stuff of legend. For perspective, Apple's market capitalization is approximately $600 billion -- nearly 27% of Apple's total market capitalization is pure cash. This gives Apple optionality: The company could use the money on research and development to bring new and improved products to the market, it could buy new businesses to add to the bottom line (like the Beats acquisition), or it could give the money back to investors via dividend increases and share buybacks (more on that later).

Alas, there is a wrinkle in Apple's huge cash pile: repatriation taxes. Apple books a fair amount of its profits outside the United States, mostly as an accounting convention to sidestep our high marginal tax rates. However, the company would have to pay taxes on any cash it "brings back" to the United States. (In all actuality where the money is physically held isn't the issue, only where profits are booked, making the "bring back" term mostly a symbolic one.) And while Apple investors would rather have the money in the United States, investors should look for Apple to continue to use its cash to add value.

Apple dividend increases are impressive, but share buybacks are better
Prudent income investors should look for companies with a track record of increasing dividends. And although Apple is a relative newcomer in terms of dividend payments -- CEO Tim Cook quickly reinstituted its dividend after taking over from Steve Jobs -- in its short history the company has produced rather significant dividend increases: After restating the dividend with a split-adjusted quarterly payout of $0.38 per share, the company's increased that figure to $0.47 within two years -- an annualized growth figure of 11.2%.

However, that isn't the most impressive part of Apple's capital allocation policies over the past two years. The following chart gives some context:

Source: Apple's 10-Ks. All figures are in millions. Left Y-axis denotes dollar figures, and right Y-axis are shares outstanding.

By shelling out over $50 billion in the past two years, the company has lowered its shares outstanding by nearly 8.5% on a split-adjusted basis, dropping shares outstanding from nearly 6.6 billion to slightly over 6 billion.

The best part: China should come online in a meaningful way soon
The bearish argument against Apple has been slowing top-line growth. And in a way that's correct. Over the past four quarters, Apple's produced $178 billion of revenue -- a 5.1% increase over the prior four quarters. And while 5.1% growth is admirable, that's not the 40% growth Apple fans have beomce accustomed to over the past few years. However, the company can look to China for its next big growth opportunity.

After finally securing deals with all three major Chinese telecoms -- China Unicom, China Mobile, and China Telecom -- the company is looking to take advantage of the country's rapid movement into 3G and 4G. The addition of the iPhone 6 Plus brings Apple's first phablet -- an attractive form factor in the Asia-Pacific region. Look for China to continue to grow in importance to Apple's top line.

Final thoughts
Shareholders continue to classify Apple as a growth stock, and rightfully so. However, many overlook the income opportunity the company presents. Cook's legacy has been to reorient the company as a more shareholder-friendly organization. Look for the company to continue to enrich shareholders by increasing its dividend and lowering its share count through an aggressive repurchase program.