Apple’s Board of Directors has approved a 4-for-1 stock split to make the stock more accessible to a broader base of investors. Each Apple shareholder of record at the close of business on August 24, 2020 will receive three additional shares for every share held on the record date, and trading will begin on a split-adjusted basis on August 31, 2020.
Bill Maurer for Seeking Alpha:
The current quarterly dividend of 82 cents per share does not divide out evenly. This is the opposite of what happened back in 2014, when Apple’s $3.29 dividend transitioned to $0.47 after the seven for one stock split that year. When it comes down to the dividend, there are three possibilities, in my opinion…
• The first scenario is that Apple just keeps the dividend at the current rate, leaving it at 20.5 cents per share after the split. While a fractional cent dividend is not the most logical thing in the market, there are plenty of companies out there that do pay dividends like this. Here, Apple would wait until the fiscal Q2 earnings report next April or May to announce any dividend changes, in line with the usual capital return update timeline.
• A large dividend increase (in this case to 25 cents per quarter). With Apple shares soaring in recent months, the annual yield for new investors has certainly dropped, so an increased payout would certainly be welcomed. Unfortunately, I don’t see this happening…
• Perhaps a nice compromise would be to just bump up the dividend slightly to $0.21 per share after the split.
MacDailyNews Take: What do you see happening (or not) with Apple’s quarterly dividend post 4-for-1 split? We think it’s much more likely to stay at $0.205 or slightly rounded up to $0.21 that anything larger before the usual annual dividend adjustment next spring.