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.
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.