Apple’s dividend potential is almost unbelievable

“Apple has obviously changed a great deal in the past few years. It has gone from a company with almost unbelievable growth rates to one that returns capital to shareholders in amounts that are unprecedented,” Josh Arnold writes for Seeking Alpha. “That transformation hasn’t stopped the stock from continuing to rise and indeed I have to imagine shareholders are more than pleased.”

“But given that Apple has undergone the transformation to become a mature company that focuses on paying shareholders, what can it do with its dividend?” Arnold writes. “The yield is down to just 1.7% thanks to the prodigious rally in the share price. But as we know, Apple can do more.”

“Apple has the potential to be a world-class dividend stock,” Arnold writes. “But it just isn’t right now. And until the strategy shifts away from being so dependent upon the buyback, it won’t be.”

Much more in the full article here.

MacDailyNews Take: We don’t expect Apple to become The Dividend King in terms of yield (Apple is already the world’s largest dividend payer in terms of total payout), but they do have to keep dividends within a healthy range. And, yes, we’d like to see a bit more per share than we’re seeing currently, but we’ll likely have to wait until next spring (late April/early May) for Apple’s annual dividend update. Also of high importance, of course, will be action on both U.S. corporate taxes and a U.S. repatriation tax holiday, which we do expect eventually.

SEE ALSO:
Apple is now the world’s largest dividend payer – May 13, 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

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

12 Comments

  1. Because paying taxes is a loss of income, Apple’s or any other corporation’s fiduciary responsibility to Wall St. investors is to pay zero taxes.

  2. For investors. it’s the holy grail. Anything like sitting on the sofa watching the cash pile grow, adding nothing to the society.

    Pigs.

  3. Dividend stocks have their place but like Warren Buffett often says dividends are bad for Share Owners and the company. Companies have to pay taxes on earnings and shareholders have to pay taxes on the dividends they receive. Best thing for “most” companies and “most” shareholders if for companies to retain earnings and if stockholders want a dividend they can sell stock they have held for more than a year and pay themselves a dividend.

  4. I’m happy with my Apple dividends because it’s one thing I know Wall Street won’t be able to corrupt. WS is always screwing with Apple’s share price so I can’t depend on any share price gains like I can with Apple’s consistently growing dividends.

    I’ve given up on any overseas tax repatriation for this year. Earlier in the year, I thought a tax reform would quickly get pushed through but I see it’s just not going to happen. There will be no major acquisitions or one-time bonus dividends coming in 2017 for Apple shareholders.

    1. Yep, ironically, it likely would’ve gone through by now if Clinton had won. It wasn’t something she was entirely opposed to and a bargaining point on the table for other things she was willing to negotiate with Republicans on.

      Meanwhile the GOP can’t seem to get their act together on a healthcare bill they’ve had years to come up with.

      Once they move on from that, we may see tax repatriation being a part of an overall budget process, as well as figuring out what to do with GSEs. This is something I see going much smoother since the GOP Congress (and Trump) is much more all on the same page and what they want won’t have as much of a direct impact on people, other than those who stand to benefit.

  5. “I have to imagine shareholders are more than pleased.”
    How about ‘incredulous’ Why?….because I bought in on faith, didn’t bitch about ups and downs…and reaped the rewards.
    TC rocks.

  6. Since buying Apple shares in 2005, dividend reinvestment has yielded a 10% increase in share #. 150% more than my initial investment.
    In comparison, my standard 401K portfolio sucks. Generally averaging a 10% increase YOY. AAPL up 1400% in 12 years.

  7. Dividend yield is calculated as (the most recent) dividend as a percentage of _current share price_. It is important to people who do not yet own Apple shares but are considering buying them. For those who already own Apple shares, the dividend yield is pretty irrelevant.

    What is more relevant to someone who already owns Apple shares is: (1) actual dividend yield — the (latest) dividend divided by the price at which the owner bought Apple shares, PLUS of course (2) share appreciation since the shares were purchase. Total return.

    To the Victor, the Spoils !

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