Here’s Apple’s GIFT to Shareholders
Cash-rich Apple (NASDAQ:AAPL) will issue its first quarterly dividend in 17 years on Thursday when it starts paying all shareholders on record as of August 13 at the rate of $2.65 per share. The iPhone maker announced plans for the new program in March alongside a $10 billion share buyback program.
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While announcing the plans, chief executive Tim Cook had noted that despite significant investments into increased research and development, acquisitions, new retail store openings, and capital expenditures, there was a significant amount of cash left over for other uses. “Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business,” Cook said. “So, we are going to initiate a dividend and share repurchase program.”
Over the next three years, Apple plans to distribute $45 billion through its buyback and dividend programs. Across 935 million outstanding shares, the quarterly dividend will amount to nearly $2.5 billion in payments to investors, according to Apple Insider. The company will pay out a second dividend in November, and continue paying investors a month and a half after the end of each subsequent quarter.
While the company’s dividend rate is fairly modest compared to its cash position, the expected $2.5 billion bill makes it one of the highest dividend payers in the U.S. Apple’s contribution will also give this month 13.12 percent of the annual sum of S&P 500 dividend payments, according to Howard Silverblatt of S&P Dow Jones Indices. August has traditionally produced 11.09 percent of yearly payments.
As of 3:04 pm EST on Wednesday, shares of Apple (NASDAQ:AAPL) traded at $630.15, down 0.24%.
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