Apple’s annual dividend decision day: America’s about to get a raise

“With Apple set to report second-quarter profits Tuesday, it’s only a little bit of an exaggeration to say all of Wall Street’s about to get a little bit of a raise,” Tim Mullaney reports for CNBC. “That’s because the spring is when Apple typically announces its annual dividend hike. After a 24 percent jump in Apple shares this year, their yield is just about 1.6 percent, well below its peak and even below the yield of the Standard & Poor’s 500 and its corresponding ETFs like IVV and SPY which yield roughly 1.9 percent.”

“And that matters, even to people who don’t directly own Apple shares, because the world’s most-valuable company — that is sitting on a stockpile of cash that has topped $250 billion — is a core holding of both index mutual funds and the inexpensive exchange-traded funds held by more than 5 million U.S. households, according to the Investment Company Institute,” Mullaney reports. “It accounts for almost 30 percent of the gain in the Dow Jones Industrial Average since it hit 20,000… In the world of ETFs, Apple shares loom large. Apple is roughly 15 percent of the S&P 500 Technology Index ETF and 17 percent of the $3.3 billion iShares U.S. Technology Fund.”

“The dividend announcement is likely to accompany an expansion of Apple’s stock buybacks, perhaps by as much as $45 billion to $50 billion, according to an estimate done by Goldman Sachs analyst Simona Jankowski,” Mullaney reports. “Its not a shareholder reward program Apple tends to divulge details on until later in the year, but CFRA analyst Zino suggested that may change if details President Trump’s plans to allow low-tax repatriation of offshore corporate cash holdings become clear… Some market watchers speculate that Apple could also offer a special dividend payment if repatriation of cash occurs.”

Much more in the full article here.

MacDailyNews Take: We expect a 9-11% dividend hike this year.

After tax repatriation, we’d love to see Apple issue a special dividend to reward shareholders.

As usual, we plan to bring you Apple’s Q217 results as soon as they’re released, right around 4:30pm today – just check our home page. Following that, we also plan to cover Apple’s Q217 conference call with live notes starting at 5pm.

Analyst: Apple may boost dividend and buyback program to reward shareholders – May 1, 2017
Get ready for up to 10.5% hike in Apple’s dividend – April 21, 2017
Analyst: Apple could double dividend, buy Netflix with repatriated cash under President Trump’s U.S. corporate tax changes – March 17, 2017
Apple’s real dividend yield is much higher than you might think – March 10, 2017
Apple preps to distribute dividends totaling $3.1 billion to shareholders – February 8, 2017

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