Friday, May 25, 2012

Apple will be paying dividend for the first time since 1995

chart_ws_stock_appleinc_201231993323.top.png
Last monday, Apple announced that it will be paying dividends for $2.5 billion as the iPhone, iPad and Mac sales increased.
Apple will be paying a dividend of $2.65 per share during the fourth fiscal quarter which begins in July,  this is the first time since 1995 that the firm is paying dividend, it also plans to buy back about $10 billion of its share during the next 3 years.
Steve Jobs' successor Tim Cook now Apple's CEO has said during a conference:
"We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure", and ""We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure,"
The strategy behind a stock buy back is to inflate its earning per share  as it reduces the number of shares outstanding, Apple said the dividends will cost them about $2.5 billion per quarter, if we combined it the share that will be bought back, the firm will use around $45 billion cash until 2015.

Growth at Apple has not been a problem, indeed the firms is now the most important Technology company be revenue and it recently has the second most profitable quarter of the history of US firms.
Nevertheless, Apple is actively looking for new investors. Some fund managers have stopped buying shares as Apple's stock price has soared. But many funds require a dividend from the stocks they invest in, so they have had to stay away from Apple.

If we compare the dividend to the actual price, the dividend yield is around 1.8% which makes it about twice the rate of technology firms in the S&P 500 and higher than competitors (such as IBM, CISCO and ORACLE), but lower than direct competitors such as IBM and Microsoft.

2 comments:

stock dividend said...

I like to say that a well constructed portfolio of dividend paying equities can provide attractive current income and allow for capital appreciation.

ex dividend

sgx dividends said...

You can get a general idea of how successfully the company has been growing by tracking dividend growth rate of at least five year period. It will also give you a good sense of management's attitude toward, and commitment to, the dividend.

Singapore dividends

Post a Comment