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11-13-2013, 09:01 PM #1
Apple Gears Up to Distribute Nearly $3 Billion to Holders with Quarterly Dividends
Apple will be paying “shareholders of record” the company’s quarterly dividend of $3.05 per share tomorrow as long as investors have owned the company’s stock before the market’s close last Wednesday. For those of you who didn’t already know, Apple automatically pays its shareholders a dividend about a month and a half after the end of each fiscal quarter. At the current stock price of around $520, the dividend yield is a little over 2%. The next dividend payout date falls on Thursday November 14th for the September quarter, but the last opportunity for shareholders to qualify for the dividend ended November 11. Any shares that exchanged hands two or fewer business days before the dividend record date don’t transfer dividend rights.
The reason for the delay, as noted by Philip Elmer-Dewitt this spring, is an accounting principle known as the “ex-dividend” or reinvestment date, which determines the party owed the dividend when shares change ownership immediately before the dividend is paid. When a share is sold, the transaction doesn’t “settle” for three days. The stock market automatically adjusts the value of the company’s stock by the value of the dividend, as the dividend reduces the value of the company because it is paid from the company’s cash holdings. This is offset by the fact that shareholders are getting the dividend and can expect an ongoing dividend in the future in addition to the ongoing appreciation of the stock. This is further enhanced by the company’s ongoing buyback program, which increases the scarcity (and therefore the value) of Apple’s stock by taking shares off the market.
For those of you who didn’t know, over the past year, Apple has been paying out around $2.5 billion in dividends, every quarter – a figure which is increased 15% to $2.8 billion earlier this year when Apple increased dividend payments to the holder of its 899.74 million outstanding shares. Starting two quarter ago, the company started paying its previously announced “significant increase” in dividends as part of an expanded capital return program. Apple raised its quarterly dividend from $2.65 per share to $3.05 and added another $50 billion to its stock buyback program.