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Apple: Large Dividend Raise Coming?

Published Wed, 13 Mar 2019 16:01:05 -0400 on Seeking Alpha

When technology giant Apple (AAPL) 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. 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. Today, I'd like to examine the prospects for this year's dividend payout increase, which could be quite impressive.
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. As you can see in the chart below, this value basically is double what Apple was paying out when the dividend was restarted. For simplicity, the $0.73 value gets the "2018" year in the chart below, since that's the year when the payout was increased to that amount, although timing of payments at that level did vary a bit.

(Source: Apple dividend history page - early dividends adjusted for split)
Given the softness seen in iPhone results back during the December period, along with the China situation to potentially not be fully resolved for some time, cash flow will be down a little this fiscal year. As the 10-Q filing shows, cash generated from operating activities was down $1.6 billion in fiscal Q1, while capital expenditures were up more than half a... Read more