BOOX Research expects Apple to announce a dividend increase with its fiscal Q2 earnings release on April 30th.
Despite the difficult operating environment this year given the COVID-19 pandemic disruption, BOOX sees Apple’s dividend supported by the company’s balance sheet strength.
BOOX Research for Seeking Alpha:
Apple is currently on a 7-year streak of consecutive annual increases to its dividend. The company typically declares the rate hike each year in conjunction with the fiscal Q2 earnings release for the quarter ending March 31st. The upcoming earnings release is scheduled for Thursday, April 30th, after the market close.
Apple has a consistent pattern of setting the dividend record date on the second Monday of May annually since 2013, with a payment occurring the Thursday of the same week. Curiously, this is an unusually quick turnaround for the payment compared to most other companies.
The actual per share amount rate hikes have been relatively random on a year-to-year basis considering a 5-cent increase in 2015 and 2016, a 6-cent increase in 2017, a 10-cent increase in 2018, and a modest $0.04 per share dividend hike last year.
From a split-adjusted dividend amount of $0.3786 first declared in April of 2012 ($2.65 per share at the time), the quarterly rate has increased to the current $0.77 per share amount representing a composite annual increase of 11% per year over the period.
We forecast Apple will increase its dividend by 6.5%, or $0.05 per share, to a new quarterly rate of $0.82.
MacDailyNews Note: Apple’s earnings report will be released right after market close at 1:30pm PDT / 4:30pm EDT on Thursday, April 30, 2020. We’ll have thise results for you as soon as they are released. The company’s conference call to discuss second fiscal quarter results is scheduled a half hour later at 2pm PDT / 5pm EDT and we’ll cover that with live notes as usual.
Great optics, if not quite as bad as a stock buyback.
Who complains when a company buys back their underpriced stock? Optics?! It’s a sign that the company strongly believes in the future.
It’s more of a sign that the managers of a company want to help themselves (see Boeing or IBM), why is just saving and investing still considered old fashioned even in these troubled times??
What’s wrong with investing in Apple?
Nothing wrong, if they use their own money and not a transfer of taxpayer funds via government incentives meant to boost consumer spending or benefit ordinary corporate employees.
I would bet against a dividend bump.
Management, Wall Street, and MBA types are against anything that advances the wealth of the common investor unless it lines up with them, the 7 to 1 split, dividends paid out, Apple’s fundamentals and staying long is what put me well into 7 digits, the buybacks however have done nothing and never will however (most companies with bad management or greedy management love them).
Apple want to help those who are long Apple? raise the dividend to .90 a share and get rid of stock buybacks (for good) which have been worthless, save the money (for that so-called current rainy day) and pay a dividend. Long since 2005. Want to actually help those who save and invest?
The more Apple buyback stocks then the higher the dividend will go up. Apple has 4.6BB shares and usually aims to fork out between $3-4BB per quarter. Essentially the buybacks are reducing the cost of dividends since the stocks are retired and so Apple can increase the dividend per share without incurring more cost over the years.
I don’t know how long Apple are planning to continue buybacks. Maybe until they think the price reflects the proper value of the company. Still that is their major focus in returning cash to the shareholders and as long as they continue to do that the dividend rate will remain in the 1-2% of share price. Since the buybacks started Apple has retired about a third of the outstanding stock and on paper at least increase the value of remaining stock (as a % of the company) by close to 50%. Thats no mean feat and what has surprised me is that Apple’s debt level has remained relatively constant even when the buyback activity has intensified.
Go big, Apple. Very big. A surprise massive dividend increase would catapult the stock sky high as the shorts bail out. It would be a very positive development.
.13 a share dividend increase would send a very positive message in the current chaos combined with the ending of buybacks.
These are quotes from, David Kostin, Goldman Sachs, Chief US Equity Strategist
”In fact, as we explained in late 2019, the main reason why stocks were at all time highs at a time when virtually every investor class was selling, was because of stock buybacks!
To be sure, our insistence ever since 2012 that it was only buybacks behind the market’s relentless grind higher
“Corporate buybacks have far exceeded demand from all other investor categories combined since 2010.
We have constantly explained that the primary source of stock buying over the past several years have been corporate management teams repurchasing their own shares using ever greater amounts of debt as a source of funds, in the process boosting not only their stock price but their equity-linked compensation and bonus pools.“
Buy-backs smell like bubble-makers to me and a way to keep the market pumped up.
He believes they provide more market and EPS stability. He also says companies that buyback show no material change in the R & D spending.