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Shares of Apple, Inc. go ex-dividend as it gears up to distribute nearly $3 billion to holders

post #1 of 15
Thread Starter 
Next Thursday, Apple will pay "shareholders of record" the company's quarterly dividend of $3.05 per share, but investors needed to own the company's stock by the market's close today in order to qualify.

Apple


Apple has been automatically paying its shareholders a dividend about a month and a half after the end of each fiscal quarter. At the current stock price of $514, the dividend yield is 2.37 percent.

The next dividend payout date falls on Thursday February 13th for the December quarter, but the last opportunity for shareholders to qualify for the dividend ends today; shares changing hands after the ex-dividend date but before the dividend record date do not transfer dividend rights.

The reason for the delay, as noted by Philip Elmer-Dewitt last spring, is an accounting principle know as the "ex-dividend" or reinvestment date, which determines the party owed the dividend when shares change ownership immediately before the dividend is paid. When a share is sold, the transaction does not "settle" for three days.

The stock market (in Apple's case, NASDAQ) automatically adjusts the value of the company's stock by the value of the dividend, as the dividend reduces the value of the company because it is paid from the company's cash holdings.

This is offset by the fact that shareholders are getting the dividend, and can expect an ongoing dividend in the future in addition to the ongoing appreciation of the stock. This is further enhanced by the company's ongoing buyback program, which increases the scarcity (and therefore value) of Apple's stock by taking shares off the market.

Over the past year, Apple has been paying out around $2.5 billion in dividends every quarter, a figure that increased 15 percent to $2.8 billion last year when Apple increased dividend payments to the holders of its 892.55 million outstanding shares.

$143 million less in dividend payments after buying back shares



Beginning three quarters ago, the company started paying its previously announced "significant increase" in dividends as part of an expanded capital return program.

Apple raised its quarterly dividend from $2.65 per share to $3.05 and added another $50 billion to its stock buyback program.

Apple's stock buyback spent $16 billion over the June quarter buying 36 million shares off the market at an average price of $444.44, then bought up another 10.4 million shares with a $5 billion repurchase in the September quarter at an average price of around $480.


Source: Ycharts.com


Apple's 2013 stock buybacks were essentially a massive acquisition of itself, larger than than even Google's $12.5 billion purchase of Motorola Mobility.
post #2 of 15
I understand that the annual dividend yield based on this quarterly dividend would be 2.37%. This is, however, misleading as the actual quarterly dividend is 0.59% of the stock price based on a stock price of $514/share.
post #3 of 15
That chart with its scale showing just the upper 10% is about as useful as a Samsung Galaxy Gear.

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post #4 of 15

Hopeful Apple increases the dividend by 15% in May like they did last year.

 

Waiting patiently for my $762 dividend after I had a paper loss of $7500 a few weeks back

post #5 of 15
I guess Apple is paying for my iPhone, unlocked.
post #6 of 15
I have my account set so that every dividend issue goes right back into buying more Apple shares.
post #7 of 15

All my equipment (iPhones/iPads/MBP) is purchased with income from iAds :)

My dividends are set to automatically reinvest in more AAPL :)

post #8 of 15
Quote:
Originally Posted by aderutter View Post
 

All my equipment (iPhones/iPads/MBP) is purchased with income from iAds :)

My dividends are set to automatically reinvest in more AAPL :)

 

So your livelihood and your investments are all in Apple. I am glad to know you are diversified. Not.

post #9 of 15
Quote:
Originally Posted by Crowley View Post

That chart with its scale showing just the upper 10% is about as useful as a Samsung Galaxy Gear.

 

You can't imagine the bottom 90%?

post #10 of 15
Visual aids should not need the reader to apply additional interpretation in order to deduce any useful information.

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post #11 of 15
Quote:
Originally Posted by Crowley View Post

Visual aids should not need the reader to apply additional interpretation in order to deduce any useful information.

 

Where "the reader" presumably refers to you, and you only?

post #12 of 15
Oh get off.

All I'm saying is that the graph axis showed a misleadingly large drop. In reality the number of outstanding shares dropped by 5%. The graph implied much more by jerking around with the axis levels and there was no need for that.

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post #13 of 15
Quote:
Originally Posted by Crowley View Post

Oh get off.

All I'm saying is that the graph axis showed a misleadingly large drop. In reality the number of outstanding shares dropped by 5%. The graph implied much more by jerking around with the axis levels and there was no need for that.

 

Did it ever occur to you that whoever drew that graph was trying to make a point? And the point MIGHT have been that there are people (and institutions) who are keeping their AAPL in a vault, and are not going to trade them any time soon. And that being the case, the graph might be a somewhat reasonable representation of the "effective" market float? Nah, couldn't be.

post #14 of 15
That's an absurd point to cloud in a graph with no written explanation. I refer you to my earlier point about visual aids and additional interpretation.

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post #15 of 15
Quote:
Originally Posted by MacOSR View Post

I understand that the annual dividend yield based on this quarterly dividend would be 2.37%. This is, however, misleading as the actual quarterly dividend is 0.59% of the stock price based on a stock price of $514/share.

 

Since dividend yields are ALWAYS presented on an annualized basis for ALL stocks, it's not misleading at all. Stock, bond and CD yields are presented on an annualized basis (APY) based on current price. My yield is not the same as that of people who paid more (or less) than I did for my shares. Yield, or return on investment, is based on what you paid for the investment. But how this is presented is consistent with how dividend yields are presented for every other income producing security.

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