Apple charms investors with record $110B stock buyback, dividend hike

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Alongside disclosing its earnings for Q2 2024, Apple also announced that it is increasing the dividend it pays to shareholders by 4%, and is also buying back more stock in one program than ever before.

During its quarterly earnings report, Apple's CFO Luca Maestri described "very high levels of customer satisfaction and loyalty," as reasons for undertaking the company's largest-ever stock buyback.

"Given our confidence in Apple's future and the value we see in our stock," he said in a statement, "our Board has authorized an additional $110 billion for share repurchases."

"We are also raising our quarterly dividend for the twelfth year in a row," he continued.

The 4% increase in the cash dividend of Apple's common stock means a rise to $0.25 per share. Shareholders who own stock as of May 13, 2024, will receive the dividend three days later on May 16.

Most recently, Apple has tended to buyback its stocks in the region of $90 billion each time. That's what it did in May 2023, and before that in April 2022.

From 2012 up to the end of 2022, Apple spent in excess of $572 billion on share buyback programs. In 2019, Tim Cook revealed that it was investor Warren Buffett who taught both him and Steve Jobs on the value of buying back shares.

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23 Comments

ramanpfaff 136 comments · 13 Years

About 2 weeks ago

Rather pathetic dividend increase. I really am surprised it wasn't $0.02/share. Let's just say my retirement isn't going as planned.

jdw 1361 comments · 18 Years

AAPL has taken a huge hit recently, so it's common sense Apple should do its buyback now, in a major way.

And before anyone gets excited about that "4% increase in the cash dividend," we're talking about a 1 penny increase here, and that increase is no different than previous increases, as per Apple's Dividend History here:

https://investor.apple.com/dividend-history/default.aspx

Stabitha_Christie 459 comments · 3 Years

jdw said:

AAPL has taken a huge hit recently, so it's common sense Apple should do its buyback now, in a major way.

And before anyone gets excited about that "4% increase in the cash dividend," we're talking about a 1 penny increase here, and that increase is no different than previous increases, as per Apple's Dividend History here:

https://investor.apple.com/dividend-history/default.aspx

It’s in line with previous increases but 4% is 4% and I’ll happily take it!

doggone 385 comments · 18 Years

ramanpfaff said:

Rather pathetic dividend increase. I really am surprised it wasn't $0.02/share. Let's just say my retirement isn't going as planned.

I don't consider Apple to be a good dividend yielding stock. At $1 a year the yield is ~0.6%. There are FDIC insured interest accounts that are yielding 4-5% at the moment. So if you are looking to live off interest those are good bets. E.g. I put spare cash into Apple's savings account. That is also where Apple Cash goes.

There are plenty of stocks that have high yields. Their problem is that their value does not grow.

I see Apple as a long term growth stock. Since I bought into the stock in the early naughties, the value has increased 42000%. That rescued my 401K for sure. I have started to divest out of Apple but still hold a good amount. The dividend is a bonus and by reinvesting it in AAPL I increase my holdings by 0.5-1% annually. So probably since 2012, the dividend has increased my stock by 10%.

Kwikiwi 3 comments · New User

I am not a big fan of stock buy backs for Apple. The main issue I have is that Apple has to take out debt to buy the stock back and it has gone from being debt free to having over $100 Billion of long term debt that now costs over 4% to service. Yes they generate lots of cash and are able to service the debt but things can change rapidly in the tech industry and that could be a problem in the future. If they did a better dividend scheme, say 50% of all net profit paid out as a dividend the return would be very healthy and by it's nature always serviceable and they could reduce their long term debt substantially. I know dividends create issues when so much of the profit (greater than 54%) is generated overseas and that a lot of people will go on about lazy balance sheets, and I understand their thinking, but I would rather they had bigger cash reserves, less debt and did some better acquisitions than so much in buy backs. Having said all of that I am very fortunate to have done well from my shareholding in Apple over a 20 year period and extremely grateful for that - I just don't like the massive buy backs.