Apple is about to go ex-dividend in just 3 days. You can purchase shares before the 7th of February in order to receive the dividend, which the company will pay on the 13th of February.
Simply Wall St. via Yahoo Finance:
Apple’s next dividend payment will be US$0.77 per share, and in the last 12 months, the company paid a total of US$3.08 per share. Based on the last year’s worth of payments, Apple stock has a trailing yield of around 1.0% on the current share price of $309.51.
Apple is paying out just 24% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It paid out 22% of its free cash flow as dividends last year, which is conservatively low.
It’s encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don’t drop precipitously.
MacDailyNews Take: “Sustainable.” As in: practically infinite. Is it smart to buy Apple before it goes ex-dividend? If you want $0.77 per share, yes. Even more so if you plan on keeping AAPL in your portfolio for awhile, as the company is likely to announce a dividend increase with their next earnings report (fiscal Q220), as they’ve done each year (here’s last year’s) since they began paying dividends.
You could do this. But AAPL bounces up and down by much more than 77 cents a day. Over the course of the week that 77 cents will get swamped by the change of the share price (either up or down).
I was hoping they would provide a deeper analysis. In a perfectly frictionless, objective market, the moment a company pays a $1B dividend, the market cap would decrease immediately by exactly $1B. I want to see if this has been the case, statistically, for Apple over the years. If not, there’s a profitable arbitrage play to be made at dividend time.
Also the price of the stock is revised down by $0.77 cents at dividend time. Therefore if the stock does not move at all you have gained nothing.
For me dividends are great because they are reinvested so it is a simple way to grow my holdings. Still if the stock does not increase value over time they are not a way to earn money.
apple is a growth stock so its not like a REIT or utility stock. it doesn’t usually tank on x-div date cuz most people don’t buy it for the dividends. yield is only 1%. why would someone buy just for the div and get out after?
if you gonna do that, most people go after the 6% or more yield stocks.
investors buy apple for the growth…the dividends are gravy…
As someone with a fair number of shares for some time now, I would have to say no. At Apple’s current pricing, the yearly dividend is just 1%. The quarterly dividend therefore is just 0.25%.
If you’re buying in a tax free account, such as an IRA, or other tax free retirement fund, and you pay no, or very little fee to buy and sell, it wouldn’t cost you anything, or much to do so. Assuming that you feel that now would be a good time to buy anyway. But unless you are buying a large number of shares, it’s probably not worth while. It’s just 77 cents per share per quarter. So 100 shares is just $77 in dividends, but $30,000 in purchase price. And if you’re paying a brokerage house a buy fee, it could be a lot more than $77
If there’s a dividend boost in Q2 2020 it’ll probably be a modest increase to $.83.
Always good work, save and invest do it now the selfish in modern society will not help you, in the end you are on your own.