The first are repatriation fees. At the end of last year, Apple had more than 60% of its cash stashed overseas. It would owe repatriation taxes to the IRS if it used this money for dividends or buybacks (or even domestic acquisitions). This might cost billions of dollars. Apple is joining the ranks of international behemoths like Oracle (Nasdaq: ORCL), Cisco (NYSE: CSCO), and Pfizer (NYSE: PFE) in pushing for a repatriation holiday that would allow corporations to bring abroad wealth home almost tax-free. These vacations have previously been granted, most recently in 2004. Others, like Canada, Japan, Germany, and France, are aiming to eliminate repatriation taxes entirely. It would be unwise for Apple to spend any significant sums of money until the situation is clarified. So it sits and waits.
More controversially, investors should consider Apple to be the polar opposite of GM (NYSE: GM). Engineers and design techs were pushed aside by MBAs and bean-counters, and GM lost its way. End of story, Apple’s success came from obsessively focused on developing the best things in the world. The company is led by designers that are masters of their craft. They’re geniuses, having built one of the most enduring brands in corporate history. However, I get the impression that management isn’t too concerned with generating shareholder value because their focus is so product-driven. Rich Greifner, one of my colleagues, was more blunt: Steve Jobs couldn’t care less about you.
Why did Apple not pay a dividend?
On the episode, Braden Dennis discussed how he likes to discover firms with a high Return on Invested Capital (ROIC), which is a measure of how effective a company’s management is, and one of his favorites was Visa (V).
Well, I adore Visa and consider them to be my “favorite buy and own for eternity” company, as they not only have a great ROIC but also pay a dividend!
Why are they handing out money, even if it’s a modest dividend, if they’re efficient users of investment capital, i.e., if they spent more, the business would expand faster, right?
So, those are the two things that I think about when I’m looking at dividends, and while it may appear that I didn’t mention Apple at all, trust me – you’ll see where I’m going with it.
So, as I previously stated, Apple pays a dividend – but what is the history of that payout over time?
In comparison to some of the other firms I’ve looked at previously, such as JNJ and MMM, Apple has a strange history.
Both of those firms are Dividend Kings, whereas Apple is the polar opposite.
Apple paid a fairly constant dividend from 1987 to 1995, then took a long break until resuming payments in 2012 and continuing to do so until September 2021, with their most recent dividend of $.22/share, or a yield of.58 percent, given in August 2021.
So, why did Apple halt dividend payments in the 1990s?
Some people may not realize it, but Apple actually faced tremendous challenges early on in their business.
They were attempting to compete against the big dogs while operating on a shoestring budget.
When you look about it, Apple was a true disruptor (pushing the market away from CDs and toward MP3s), and any firm that does that requires a considerable amount of cash, so paying a dividend was just not an option.
Another factor is that, rather of growing organically, big digital companies frequently undertake acquisitions when they need to grow in a specific direction.
Acquiring someone who is crushing it in a certain area of business that would be really beneficial to your organization could be both cheaper and more efficient.
Rather than spending years and years and a lot of money trying to catch up, you can simply buy the company and start profiting from the synergies right away.
So Steve Jobs wants to save some money:
“We know if we need to acquire anything, a piece of the puzzle to construct something large and bold, we can write a check for it instead of borrowing a lot of money and risking our entire company,” he said. “Having cash in the bank provides us with a great deal of security and freedom.”
I actually discovered a really interesting Q&A from the International Business Times about Apple after they stopped paying their dividend in the 1990s and before they started paying it out again to give some perspective on why a firm might wish to keep that cash.
If you only look at the Apple Dividend History, you’ll be missing out on a lot of information.
As you can see in the chart below, the dividend appears to be very steady until 1995, when it abruptly drops off, and then resumes in 2012:
Does Apple pay in dividends?
From 1987 until 1995, Apple paid a dividend on a regular basis before ceasing to do so in 1995. Apple resumed paying a dividend in 2012, and it has increased it year after year since then.
Apple increased their quarterly dividend by $0.05 ($0.20 per year) even in the age of COVID. Apple pays a dividend that is nearly double what it was in 2012.
In 2012, Apple resumed paying a dividend. The business chose to reactivate its dividend program after seeing such great success with its iPod and subsequent iPhone and iPad offerings – devices it produced with the money it saved by not paying dividends for those 17 years.
In addition, it began a share repurchase program. In 2012, Apple’s dividend alone cost $2.5 billion per quarter, making it one of the top dividend stocks. Dividends and stock repurchases are expected to cost $45 billion, according to the business.
Apple currently pays a $3.28 annual dividend, which is paid in quarterly installments of $0.82. The dividend yield for the company is 0.85 percent, which is about average for tech equities. In comparison, the S&P 500’s average dividend yield is little under 2%.
Why buy a stock that doesn’t pay dividends?
The ex-dividend date is crucial for investors because it establishes when a shareholder must own a stock to receive a dividend payment. If an investor does not buy stock before the ex-dividend date, he will miss out on the dividend payment. If, on the other hand, an investor sells the stock after the ex-dividend date but before the dividend is paid, they are still entitled to the payout because they owned the stock prior to and on the ex-dividend date.
Investing in Stocks that Offer Dividends
Investing in dividend-paying stocks is clearly beneficial to owners. This is due to the fact that investors can get a regular income from their equity investment while continuing to retain the shares in order to profit from additional share price appreciation. Dividends are money in your pocket as the stock market rises and falls.
Companies that have a track record of paying regular dividends year after year tend to be better managed because they are conscious that they must provide cash to their shareholders four times a year. Companies with a lengthy history of paying dividends are often large-cap, well-established companies (e.g., General Electric). Their stock prices may not give the same large percentage gains as those of younger firms, but they are more stable and generate consistent returns on investment over time.
Investing in Stocks without Dividends
Why would anyone want to put their money into a firm that doesn’t provide dividends? In reality, there are a number of advantages to investing in equities that do not pay dividends. Companies that do not pay dividends on their stock often reinvest the money that would have gone to dividend payments towards the company’s expansion and overall growth. This suggests that their stock prices are likely to rise in value over time. When it comes time to sell the shares, the investor may well see a larger rate of return than he would have gotten if he had invested in a dividend-paying stock.
Companies that don’t pay dividends may use the money from future dividend payments to buy back stock on the open market, which is known as a “share buyback.” When there are fewer shares available on the open market, the company’s stock price rises.
Does Apple pay 2020 dividend?
Apple paid a $0.68 split-adjusted annual dividend in fiscal year 2018. Its annual dividend was $0.75 in 2019, and $0.795 in 2020.
Does Apple pay dividends 2021?
On November 5, 2021, Apple Inc. (AAPL) will begin trading ex-dividend. On November 11, 2021, the company will issue a cash dividend of $0.22 per share. The cash dividend is payable to shareholders who acquired AAPL before the ex-dividend date. AAPL has paid the same dividend for the third quarter in a row. The dividend yield is.58 percent at the current stock price of $151.49.
Do Tesla pay dividends?
Tesla’s common stock has never paid a dividend. We want to keep all future earnings to fund future expansion, so no cash dividends are expected in the near future.
Is it worth investing in dividend stocks?
Dividend-paying stocks allow investors to get paid even when the market is volatile and capital gains are difficult to come by. They are a good inflation hedge, especially when they expand over time. Unlike other sources of income, such as interest on fixed-income investments, they are tax-advantaged.
Are dividend paying stocks worth it?
Stocks that provide dividends are always safe. Dividend stocks are regarded as secure and dependable investments. Many of them are high-value businesses. Dividend aristocrats—companies that have increased their dividend every year for the past 25 years—are frequently seen as safe investments.
How often are Apple dividends paid?
Apple pays dividends on a regular basis. Apple, like most other dividend-paying corporations in the United States, pays four dividends per year, which means that investors get a dividend payment every quarter.
