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Apple will start paying shareholders a $9.9 billion annual dividend, which is equivalent to $10.60 a share or a roughly 1.8% yield with Apple shares trading at nearly $600. This dividend, the largest initial one ever by a U.S. company, comes on top of large stock price gains enjoyed by investors. Shares of the gadget maker are already up 70% the past year.
The dividend ushers in a new era for Apple, where the company financially transitions from being a scrappy upstart that pours its profit into new products, into more of a mature firm that generates more cash than it can use. Apple is now the second largest dividend payer, just behind telecom utility AT&T at a $10.4 billion annual payout.
And the move makes Apple less of a speculative play and more of a candidate for investors looking for a mature company. The dividend is a steady payment of cash for investors who have become accustomed to collecting on the stock's breathtaking capital gains. Apple's 1.8% dividend yield is in line with the Standard & Poor's 500's roughly 2% yield.
Given the sheer size of the dividend, investors may be wondering:
• What does the fact Apple is paying a dividend mean for the company and stock market?
The dividend signals a significant financial shift for Apple, as the company's profitability far outstrips its internal needs for expansion, research and hiring. Apple's dividend is the largest new dividend ever paid by a company, beating the $1.3 billion record previously set by Cisco Systems, says S&P Capital IQ.
Apple's dividend further extends the record dividends being paid by S&P 500 companies this year. Just Apple's dividend alone increases the S&P 500's payment by 3.9%.
Apple's dividend is so massive, it's even shifting the financial performance of the entire technology sector. The tech sector, which once shied away from dividends because they were regarded as a refuge for companies with no growth, is now the second largest payer of the 10 sectors S&P Capital IQ tracks. The tech sector's dividends account for 13.5% of all dividends paid by S&P 500 stocks, following consumer staples at 14.8%. Apple's dividend increases the total dividends paid by the tech sector by nearly 32%.
And the fact Apple can afford such a giant dividend is a testament to its power not only in technology, but in music, gaming, retailing and entertainment. Apple's market value, which rose 2% after announcing the dividend to $558 billion, makes it 4.3% of the market's total market value, just behind IBM's historic 6.4% weighing at the height of its power in 1985.
• Does this use up much of Apple's cash pile?
It hardly makes a dent. Apple is sitting on nearly $100 billion in cash and investments, and that sum continues to mount. Last year, the company accumulated $45 billion in cash from operations, spending just $4.4 billion in cash for capital expenditures, like plant expansion or equipment. The company's dividend uses up just a quarter of the cash the company generates in one year.
Along with the dividend, Apple announced plans to buyback $10 billion of its stock over the next three years. Apple says the dividend, stock buyback and cashing out of some restricted stock, will use $45 billion of cash over the next three years.
• Who gets the dividend?
FAQs
In the quarter ending March 2024, Apple, Inc. has declared dividend of $0.24 - translating a dividend yield of 0.64%.
How would you explain the large increase in dividends? ›
Dividend Increases
The first is simply an increase in the company's net profits out of which dividends are paid. If the company is performing well and cash flows are improving, there is more room to pay shareholders higher dividends. In this context, a dividend hike is a positive indicator of company performance.
Which company pays the highest dividend? ›
Overview of the Top Dividend Paying Stocks in India
- Tata Consultancy Services Ltd. ...
- HDFC Bank Ltd. ...
- ICICI Bank Ltd. ...
- Hindustan Unilever Ltd. ...
- ITC Ltd. ...
- State Bank of India. ...
- Infosys Ltd. ...
- Housing Development Finance Corporation Ltd.
Cash flow and dividend yield
Apple stock pays a relatively paltry 0.6% yield, in contrast. That's enough to put the iPhone maker above other members of the "Magnificent Seven," though, except for Microsoft. Cash flow is solid at both companies, but Apple easily wins this matchup.
What is the Apple dividend for 2024? ›
Apple's next quarterly payment date is on Feb 15, 2024, when Apple shareholders who owned AAPL shares before Feb 09, 2024 received a dividend payment of $0.24 per share.
What stock pays dividends monthly? ›
7 Best Monthly Dividend Stocks to Buy Now
| Stock | Market Capitalization | 12-month Trailing Dividend Yield |
|---|
| Modiv Industrial Inc. (MDV) | $112 million | 7.7% |
| LTC Properties Inc. (LTC) | $1.3 billion | 7.2% |
| Realty Income Corp. (O) | $44 billion | 6.4% |
| PermRock Royalty Trust (PRT) | $53 million | 10.3% |
3 more rowsFeb 29, 2024
After stock price drops proportionality caused by paying stock dividend, stock price generally increases in certain degree so stock dividend will increase circulating shareholders' wealth indirectly.
Why do investors want dividends? ›
Investors also see a dividend payment as a sign of a company's strength and a sign that management has positive expectations for future earnings, which again makes the stock more attractive. A greater demand for a company's stock will increase its price.
Why dividend investing is superior to growth? ›
Some of the advantages of dividend stocks are that they tend to outperform growth stocks, offer consistent cash flow at regular intervals, and because stocks that offer dividends typically indicate that a company is financially healthy enough to pay shareholders cash, the investment can be less risky.
How to make $5000 a month in dividends? ›
To generate $5,000 per month in dividends, you would need a portfolio value of approximately $1 million invested in stocks with an average dividend yield of 5%. For example, Johnson & Johnson stock currently yields 2.7% annually. $1 million invested would generate about $27,000 per year or $2,250 per month.
Performance List of Multibagger Penny Stocks for 2024
| Name | Book Value | 1 Year (%) |
|---|
| J Taparia Projects | ₹ 18.56 | 345.61% |
| Rasi Electrodes | ₹ 9.45 | 52.90% |
| 3P Land Holdings | ₹ 37.75 | 24.68% |
| SAL Steel | ₹ 4.87 | 110.65% |
6 more rowsApr 24, 2024
10 Best Dividend Stocks to Buy
- Verizon Communications VZ.
- Johnson & Johnson JNJ.
- Philip Morris International PM.
- Altria Group MO.
- Comcast CMCSA.
- Medtronic MDT.
- Pioneer Natural Resources PXD.
- Duke Energy DUK.
If you are considering a dividend-focused strategy, you should carefully assess your income needs and risk tolerance. For example, if you require an income of 100,000 per year and were looking at a dividend yield of 10%, you would need to invest 1,000,000.
Why are Apple dividends so low? ›
Apple's dividend isn't low when compared to dividends paid by other companies in the tech sector. What's more, it's common for growth companies, which Apple is still considered, to reinvest more cash back into the company instead of paying higher dividends.
How much is Apple dividend per year? ›
Dividend Data
AAPL 's annual dividend is $0.96 per share. This is the total amount of dividends paid out to shareholders in a year. Apple Inc.'s ( AAPL ) ex-dividend date is February 9, 2024 , which means that buyers purchasing shares on or after that date will not be eligible to receive the next dividend payment.
What months does Apple pay dividends? ›
Historical Dividend Data
| Ex-Date | Record Date | Pay Date |
|---|
| May 06, 2022 | May 09, 2022 | May 12, 2022 |
| Feb 04, 2022 | Feb 07, 2022 | Feb 10, 2022 |
| Nov 05, 2021 | Nov 08, 2021 | Nov 11, 2021 |
| Aug 06, 2021 | Aug 09, 2021 | Aug 12, 2021 |
21 more rowsApple Stock Forecast
The 30 analysts with 12-month price forecasts for Apple stock have an average target of 204.6, with a low estimate of 158 and a high estimate of 250. The average target predicts an increase of 20.12% from the current stock price of 170.33.
What is the dividend execution date? ›
The ex-dividend date or "ex-date" is usually one business day before the record date. Investors who purchase a stock on its ex-dividend date or after will not receive the next dividend payment. Instead, the seller gets the dividend. Investors only get dividends if they buy the stock before the ex-dividend date.
What is the expected dividend growth rate of Apple? ›
Apple's dividend growth for fiscal years ending September 2019 to 2023 averaged 5.6%. Apple's operated at median dividend growth of 5.5% from fiscal years ending September 2019 to 2023. Looking back at the last 5 years, Apple's dividend growth peaked in September 2021 at 7.3%.
