After ‘more modest’ dividend increases in the past two years, Apple could get back to double-digit dividend growth when it details investor-return plans for the year, Emily Bary writes for MarketWatch. Apple will release second fiscal quarter results, including dividend and buyback plans, after market close on Wednesday, April 28th at 1:30pm PDT / 4:30pm EDT. The company will then hold their conference call with analysts to discuss the results at 2pm PDT / 5pm EDT. MacDailyNews cover both of those events as usual at those time.
“We think Apple’s capital return update could be the most incremental consideration coming out of Apple’s upcoming F2Q21 results,” Wells Fargo analyst Aaron Rakers wrote.
Though Apple shares have nearly doubled in the past year, Morgan Stanley’s Katy Huberty anticipates that the company will remain aggressive with its buybacks. She predicts that the company could add $60 billion to its buyback authorization this quarter, compared with the $50 billion increase that Apple approved a year ago… She also projects a 10% increase in Apple’s dividend, which would bring the annual payout to 90 cents a share.
Apple’s dividend announcement could be a bigger driver of stock performance than the buyback plans, Wells Fargo’s Rakers suggested. He thinks Apple could raise its dividend by at least 10%, an increase that would mark the highest annual hike since Apple’s 16% bump in 2018 and stand in comparison to the “more modest” increases of 5.5% and 6.5% that Apple delivered in 2019 and 2020, respectively… Rakers is expecting a roughly $50 billion increase to the buyback program, flat with a year ago.
MacDailyNews Take: We’d be surprised to see the dividend hiked to anything more than 24-cents per share, up 3.5-cents from the current 20.5-cents per share. In fact, we’d be surprised to see $0.24/share. If we had to bet, we’d bet on $0.23/share, give Apple’s recent history of dividend increases.
As per earnings, analysts consensus (FactSet) expects $0.98 EPS (vs. $0.64 EPS in Q220). The Estimize estimate calls for $1.02 EPS. For revenue, FactSet consensus models expect $76.7 billion, while the Estimize estimate is for $78.3 billion (vs. revenue of $58.3 billion in Q220).
As my interest in income grows, my holdings in AAPL diminish. There are plenty of other companies that pay out more dividends. Capital earnings don’t pay the bills.
Where I live, capital gain is not taxed. Therefore, I‘d rather have less dividend and more buybacks respectively a higher stock price.
Show us when buybacks boosted stock price (sustainably). Buybacks save Apple money by paying fewer dividends, they don’t help the remaining investors.
Stock buybacks boost earnings per share, which in turn cause share prices to rise even assuming flat profits and a constant P/E ratio.
Given the meteoric rise in Apple’s stock over the past few years, the 5-7% per year of share appreciation due to buybacks is somewhat obscured. But it is there in the mix.
Capital Gains have allowed me to retire 8 years early!
But our newly ‘placed’ imbecile in USA wants to screw it all up if he gets his way.
Although I wish Apple paid higher dividends, what I receive pays all my living expenses for the year as I’m a senior citizen with relatively low costs for home upkeep. If Apple boosts the dividend by 10% I’ll consider myself very lucky. I know Apple prefers using its money for stock buybacks more than any other form of capital return. Apple will surely keep dividends well below a 1% yield. That’s a disappointment.
When I see a company such as Home Depot being generous enough to give a 6.60 dividend at a 2% yield, I can only shake my head in disbelief considering Apple’s cash flow. Apple is rather stingy in comparison, but I have no legitimate complaints in owning Apple stock. I really should be grateful to how well the company has been run since Steve Jobs passing.
You do realize the current $0.205 dividend per share is per quarter, right? At $0.24, the figure you cite above, the annual dividend would amount to $0.96 . . . a 17% increase over today’s $0.82. Gawd, but I’d kill for that!
A nice even .25 per share would be nice 🙂
Apple should be paying more dividends to people who actually OWN the company. It’s not Tim Cook’s company. He is an employee, not an owner.
AAPL’s stock price has plunged 4 out of the last 5 earnings reports. Shareholders run for the exits every time Tim reports earnings. Will this week be any different?
The short term day traders will sell always do, long since 2005 thru three stock splits, Apple plays long and so should you if you own shares in Apple.
Apple is a easy stock to hold long the fundamentals and the tech are the best across the board.