Apple sports impressive dividend growth potential

“Between 1996 and 2011, Apple famously did not pay a dividend. Then, on July 24, 2012, the company declared a quarterly dividend of $2.65 per share (or $0.38 when you adjust for the 7 for 1 split),” Stock Market Sherpa writes for Seeking Alpha. “The following April, Apple announced a dividend increase to $3.05 per quarter ($0.435) and this past spring, announced another one. The current dividend payment of $0.47 per share translates into a yield of approximately 1.9% based on the company’s most recent share price and represents annualized dividend growth of a little less than 12% since it was reinstated two years ago.”

“Using… fairly conservative expectations, Apple will be in a position to increase its dividend by more than 100% in total over the coming three years (an annualized rate of 30.5%). If Apple’s share price did not change from today’s value, it would yield 4% in three years’ time,” SMS writes. “Apple has the potential to average 30% dividend growth over the coming three years if management decides to make this a priority. Due to Apple’s projected earnings growth and its track record of delivering more free cash flow than it reports in net income, the company’s shareholders should be in store for significant dividend increases over the coming years.”

Read more in the full article here.

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