Is Apple a good investment for dividend growth investors?

“I bought Apple as a dividend growth stock,” Christopher Price writes for SeekingAlpha. “Usually, dividend growth investors lean toward dividend payers that have paid out a growing dividend for a decade or more. Most of my portfolio would fall into the latter category. Also, the dividend yield that Apple had at that time was just around 1.8 percent, which is lower than I would usually buy. However, I chose to invest a portion of my portfolio into companies that has a smaller dividend with the potential of higher growth over the long term.”

“Apple has the potential to grow its dividend much more quickly than a stalward like AT&T. Its first dividend in nearly two decades was paid out in August 2012, so there is only a four-year history of recent Apple dividends,” Price writes. “The first payout was just under $0.38 when accounting for the 7-for-1 split that the company provided for shareholders in June 2014. There have been four dividend raises in the past four years. Shareholders have benefited from raises of 15, 8, 11, and 10 percent over the past four years, which is much higher than the growth exhibited by some of the most popular dividend-paying stocks like the aforementioned AT&T.”

“A dividend that grows by around 10 percent a year should double approximately every seven years, and Apple’s payout is already more than 50 percent higher than it was just four short years ago,” Price writes. “This shows that it should come close to doubling after about seven years if their growth remains fairly constant”

Read more in the full article here.

MacDailyNews Take: As Jim Cramer likes to say, “Own Apple, don’t trade it.”

6 Comments

    1. Even if buybacks don’t seem to raise the stock price immediately they do in the long run. And allow for increases in dividends per share as more cash to split fewer times.

      I like that Apple does both. Especially when their stock is cheap, they should buy back shares.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.