Apple: Large dividend raise coming?

“When technology giant Apple reports its fiscal second quarter earnings either in late April or early May, perhaps the biggest news for some investors won’t be the company’s results,” Bill Maurer writes for Seeking Alpha. “It’s this report each year where management announces its update for the company’s massive capital return plan, which usually means an increase to both the share repurchase program as well as the quarterly dividend.”
“When it came to last year’s dividend projection, I figured we’d see an increase in the teens, percentage wise. Apple did, in fact, come in the middle of my range, with a 15.9% increase to $0.73 per share,” Maurer writes. “Management decided to step up big time when it came to the buyback. After two fiscal years where no more than $11 billion per quarter was spent on the buyback, thanks to higher tax rates and much of the cash located outside the US, Apple spent at least $19 billion per quarter in three of the four 2018 calendar quarters. The company also didn’t have to take out more debt to facilitate the plan.”
“Even with all of those share repurchases and dividend payments, Apple still had $130 billion in net cash left on the balance sheet at the end of the latest quarter,” Maurer writes. “I believe investors looking at Apple’s potential dividend hike this year will be pretty happy. While some softness in current quarter results may hamper cash flow generation a little this year, Apple still will produce a tremendous amount of cash and the balance sheet remains second to none. With last year’s buyback bringing the share count down by more than 7%, it would not surprise me to see a larger percentage raise than we saw in 2018. As a result, an increase that approaches 20% could be in the cards.”
Read more in the full article here.
MacDailyNews Take: 20% would be a nice little raise for AAPL investors, especially those who rode the roller coaster of the last 6 months.