Visa was one of Braden Dennis’ favorite companies, and he discussed how he likes to discover firms with high ROIC, which is essentially a measure of how well the company’s management is doing, on his podcast (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.
So, as previously indicated, Apple distributes a dividend to shareholders. What has the dividend history been like historically?
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 at all.
From 1987 to 1995, Apple paid a very constant dividend, but then took a long vacation, only to take the dividend back up 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.
Since when did Apple cease paying dividends?
Some people may not be aware of this, but Apple truly had some serious challenges to overcome when they first started out.
They were trying to compete with the big dogs, but they were 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 method rather than doing so themselves.
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.
As a result, Steve Jobs wanted to keep some of his own money:
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. “We feel safe and free since we have so much 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.
In the graph below, you can see that the dividend is quite stable up until 1995, when it entirely drops down, and then climbs back up in 2012:
What dividend does Apple pay per share?
- After a 7 percent rise in the first quarter dividend, Apple paid a $0.22 per share dividend in the second quarter of 2021.
- During the fiscal year 2020, it had a dividend payout ratio of 25%, which is in line with the previous two years.
- From the second quarter of 2016 through the second quarter of 2021, Apple’s quarterly dividend climbed at an annualized pace of 9.1 percent.
How often does Apple pay a dividend?
How Often Is Apple’s Dividend Policy Updated? Apple, like the majority of dividend-paying US corporations, distributes a quarterly dividend payment to its shareholders.
Does Apple pay dividends 2021?
On November 5, 2021, pple Inc. (AAPL) will begin trading ex-dividend. On November 11, 2021, shareholders will get a cash dividend of $0.22 per share. Prior to the ex-dividend date, AAPL shareholders are entitled to a cash dividend. AAPL has now paid the same dividend for the third consecutive quarter. As of this writing, the dividend yield is.58 percent.
Why is Apple’s dividend so low?
This is because Apple’s new debt has a very low interest rate. On the $2.5 billion of five-year notes, which bear a lower after-tax interest cost for Apple than the after-tax cost of the dividend it pays its common stockholders. However, Apple is not able to deduct the dividend from its taxes.
Do Tesla pay dividends?
On our common stock, Tesla has never paid a dividend. 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.
Does Apple pay dividends monthly?
From 1987 through 1995, Apple paid a dividend, which was discontinued in 1995. As of 2012, Apple began paying a dividend for the first time in a decade, and it has steadily increasing its dividend thereafter.
To this day, even in the era of COVID, Apple has boosted its quarterly dividend by $0.05 ($0.20 annually). As of right now, Apple’s dividend is more than double what it was back in 2012.
In 2012, Apple relaunched its dividend program. The business decided to revive its dividend program after 17 years of not giving dividends because of the success of its iPod and later iPhone and iPad offerings, devices it built using the cash it saved from not offering dividends.
A share repurchase program has also been launched. In 2012, Apple’s dividend cost the company $2.5 billion a 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. This equates to a dividend yield of 0.85 percent, which is in line with the industry standard for technology firms. In contrast, the S&P 500’s average dividend yield is less than 2%.
Will Apple dividend increase?
Several prominent American corporations announced dividend increases this week, including Apple, Chevron, and International Business Machines.
Apple (ticker: AAPL) announced an increase of 7 percent in its quarterly dividend to 22 cents per share, up from 20.5 cents previously. Dividends included, the stock had a year-to-date return of 0.75 percent as of April 29, with a yield of 0.7 percent.
