Apple May Become S&P’s Dividend Leader in 2014

Apple campusApple (NASDAQ:AAPL) may become the biggest dividend payer in the S&P 500 index in 2014, reports Maggie McGrath at Forbes. According to data from financial information and services company Markit via Forbes, Apple has been forecasted to shell out $11.8 billion in dividends this year, almost 15 percent more than last year. The California-based company’s expected 2014 dividend payout represents 30 percent of its earnings.

Exxon Mobil (NYSE:XOM) is expected to be close behind Apple with $11.7 billion in dividend payouts this year. If Markit’s forecast is accurate, this would be a reversal of last year’s positions, when Exxon Mobil narrowly beat out Apple’s $10.6 billion in dividend payments with a total of $10.7 billion. The oil and gas multinational took the lead from Apple last year after the iPhone maker reduced its total share count with an expansion of its share repurchase program. Exxon Mobil’s $11.7 billion in dividend payments is 8.5 percent more than it paid out last year and equals a dividend payout ratio of 36 percent.

However, as noted by Forbes, Markit also observed that Apple’s expected dividend payout may depend on “how fast and aggressive its share repurchases occur in the upcoming year especially given activist pressure to increase the program.” Markit was likely referring to activist investor Carl Icahn’s ongoing efforts to expand Apple’s share buyback program.

Apple’s recent preliminary proxy filing with the Securities and Exchange Commission revealed that Icahn is seeking $50 billion of share repurchases during fiscal year 2014. Apple’s shareholders will have an opportunity to vote on Icahn’s proposal at the company’s upcoming shareholder meeting on February 28. Apple’s board and management team have recommended that shareholders vote against the proposal.

As noted by Forbes, Markit found that the overall dividend payment participation rate for companies in the S&P 500 index in 2014 will be slightly higher than last year. According to FactSet data, 417 companies in the S&P 500 index paid dividends last year, while Markit forecasted that 422 companies will payout dividends this year.

On the other hand, the total average dividend payout ratio for the S&P 500 index stocks in 2014 will remain stagnant at 35 percent, the same ratio seen last year. This percentage is also significantly lower than the index’s historical average of 50 percent.

Here’s how Apple has traded over the past five sessions.

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