Visa was one of Braden Dennis’ favorite companies, and he discussed how he likes to discover companies with high ROIC, which is actually a measure of how well the company’s management is doing (V).
Honestly, I’m a big fan of Visa, and I consider them my “favorite buy and own for eternity” company because of their strong ROIC and dividends.
They could have invested more and grown the business more quickly, right? So why are they handing out dividends if they’re efficient consumers of investment capital?
In terms of dividends, those are the two things I keep going back and forth on in my mind, and I know it might seem like I didn’t mention Apple at all, but trust me you’ll see where I’m going with it.
When it comes to Apple’s dividends, as I’ve already indicated, how has the dividend’s history looked through time?
Compared to other companies I’ve studied, like JNJ and MMM, Apple has a strange history.
Apple, on the other hand, is not a dividend-paying company in the truest sense of the term.
From 1987 to 1995, Apple paid a very constant dividend, but then took a long vacation, only to take the dividend back up again in 2012 and pay it up to today, September 2021, with their most recent dividend of $.22/share, which is a yield of.58 percent.
In the 1990s, why did Apple stop paying dividends?
Some people may not be aware of this, but Apple faced tremendous challenges in the early stages of its existence.
Because they were competing against the big dogs, they were severely short on funds.
Think about it: When you consider that Apple was a true disruptor, it was going to take a lot of money from the company, and paying out a dividend was simply not in the cards.
Another reason why you’ll see these tech companies make acquisitions rather than expand organically is because they often need to grow in a specific direction.
If a competitor is doing a terrific job in an area that may benefit your company, it may be more cost-effective and efficient to acquire them.
Just buying the company will allow you to quickly benefit from the synergies that have been built up over time, rather than spending years and years attempting to catch up.
So, Steve Jobs wanted to keep some money in his wallet:
As a result, “we know that if we need to acquire anything, a piece of the puzzle to construct something large and daring, we can write a check for it and not borrow a lot of money and put our whole company at danger,” he said. It provides us with a lot of protection and flexibility because of the money in the bank.”
For additional context on why a corporation might want to hang onto that cash, I found a really interesting Q&A from the International Business Times about Apple after they stopped paying its dividend in the 1990s and before they started paying it again.
If you only look at Apple’s dividend history, you’ll lose out on a lot of important information.
Here, you can see that the dividend is very steady until 1995, when it entirely goes off, and then starts back up again in 2012::.
How much does Apple pay per dividend?
- A 7 percent increase from the first quarter’s dividend of $0.205 per share was made by Apple in the second quarter of 2021, when it paid out $0.22 per share.
- With a 25 percent dividend payout ratio, it is in line with the previous two fiscal years.
- By 2021, Apple’s quarterly dividend would have grown by 9.1% annually, compared to the second quarter of 2016.
What months does Apple pay dividends?
November 5, 2021, is the date when pple Inc. (AAPL) will go ex-dividend. On November 11th, 2021, shareholders will get a dividend payment of $0.22 per share in cash. In order to receive the dividend payment, AAPL shareholders must have purchased the stock prior to the ex-dividend date. This is the third consecutive quarter that Apple has paid the same dividend. The dividend yield is.58 percent at the current stock price of $151.49.
Does Apple pay dividends monthly?
From 1987 through 1995, Apple paid a regular dividend to shareholders. In 1995, the business stopped paying dividends. For the first time since 2012, Apple began to pay a dividend, and it has steadily increasing its payout each year since then.
COVID has not deterred Apple from increasing its quarterly payout by $0.05 ($0.20 per year), even in the midst of this. As of this writing, Apple’s dividend is nearly twice as high as it was in 2012.
In 2012, Apple relaunched its dividend program. As a result of the success of its iPod, iPhone and iPad, the business decided to resume its dividend program after 17 years of not paying out dividends to its shareholders.
A share repurchase program has also been launched. At the end of 2012, Apple paid out $2.5 billion in dividends per quarter, making it one of the best dividend-paying stocks. Dividends and stock repurchases are expected to total $45 billion, according to the company’s forecast.
Apple now pays a dividend of $3.28 per year, which is divided into quarterly payments of $0.82. For tech equities, that means the company’s dividend yield stands at 0.85%, which is in the middle of the pack. In contrast, the S&P 500’s average dividend yield is less than 2%.
Why is Apple’s dividend so low?
It’s because Apple’s new loan has a low interest rate. On the $2.5 billion of five-year notes, which bear a lower after-tax interest expense for Apple than the after-tax cost of the cash dividend that Apple pays its ordinary stockholders. However, Apple is not able to deduct the dividend from its taxes.
Do Tesla pay dividends?
Tesla has never paid a dividend to its shareholders. We do not expect to pay any cash dividends in the near future because we plan to use all future earnings to fund future growth.
