Apple’s steady rise in revenue has allowed it to increase annual dividends
Fact checked by Ariel Courage
Reviewed by Julius Mansa
Apple Inc. (AAPL) resumed its dividend payments in 2012 after a 17-year hiatus. At the end of its fiscal year 2011, it had accumulated cash and cash equivalents of less than $10 billion. That cash hoard has grown to almost $30 billion by the end of fiscal year 2024.
Since 2012, Apple has seen a steady rise in revenue and earnings, allowing it to increase annual dividends. As of Q4 2024, it was paying a quarterly dividend of 25 cents per share, which gave the stock a 0.42% dividend yield.
Key Takeaways
- Tech stocks do not always pay dividends due to investing their earnings back into growth.
- Apple, however, has matured into one of the largest and most profitable companies in the world, making it a reliable dividend stock.
- As of Q4 2024, Apple’s dividend yield was 0.42% and its dividend per share was 25 cents.
Dividend Payout
Apple’s dividends paid totaled $15 billion for the fiscal year 2023 and $15.2 billion in 2024. The net income for 2023 was $97 billion, which put the dividend payout ratio at 15.5% for 2023. In 2021, the payout ratio was 16.2% based on $93.74 billion in net income.
Apple’s dividend payout ratio has stayed relatively steady and its cash hoard of cash and cash equivalents remains relatively high at about $30 billion as of the end of FY 2024.
Is Apple’s Dividend Low?
Apple’s dividend isn’t low when compared to dividends paid by other companies in the tech sector. What’s more, it’s common for growth companies, which Apple is still considered, to reinvest more cash back into the company instead of paying higher dividends.
Dividend Yield
While dividend payout is a measure of financial strength often used in fundamental analysis of stock investments, the dividend yield is more useful for investors with an overwhelming goal of receiving investment dividends.
For dividend investors, stock price appreciation is usually a secondary priority to the dividend income. A stock’s dividend yield is the annual dividend divided by the stock’s trading price. Apple’s annual dividend in 2024 was 98 cents (25 cents paid in two quarters and 24 cents paid in two as well). Based on Apple’s stock price as of Nov. 29, 2024, of around $237 per share, the dividend yield for 2024 is approximately 0.41%.
Even though Apple’s annual dividends have consistently increased in the years after the company’s 2012 dividend reinstatement, its stock has—at times—risen at much faster rates, potentially resulting in its dividend yield being less competitive for investors interested in dividend income.
Note
At just around a 0.41% dividend yield for 2024, Apple’s dividend yield may seem relatively low. However, Apple is still considered to be a growth company. Therefore, it reinvests its retained earnings into developing new projects, acquiring companies, and other growth opportunities. Indeed many tech stocks, and growth stocks in general, do not pay any dividends.
Dividend Growth
For most companies, a dividend cut is an exception, rather than the norm. Ideally, companies increase their dividends over time, assuming their revenue and earnings growth can support it.
Apple’s quarterly dividend paid during the fourth quarter of 2024 was 25 cents, a 4.17% increase from the 24 cents paid during the first quarter of 2024. Note that Apple’s fiscal year ends at the end of September.
Does Apple Pay a Dividend?
Yes, AAPL has paid a quarterly dividend since 2012. The company also paid a quarterly dividend from November 1988 to November 1995 before suspending it for 17 years.
How Often Does Apple Stock Pay a Dividend?
Apple stock pays a dividend four times a year. Its quarterly dividend has been payable during February, May, August, and November of each year.
Why Is Apple’s Dividend So Low?
For a high-tech growth company, Apple’s dividend is not really that low. Alphabet (Google), for example, does not pay any dividends. Nor do Meta (Facebook), Tesla, or Netflix. Some comparable larger, mature tech companies also pay low dividends, such as NVIDIA (0.02% dividend yield, as of December 2024) and Microsoft (0.73% dividend yield, as of December 2024). Instead of paying higher dividends, Apple and these companies use retained earnings to reinvest in the company and its growth opportunities.
The Bottom Line
Apple is a large, prominent, and profitable company that pays out a dividend, making it an attractive option for investors, on top of its impressive stock price appreciation. While it may not pay out as high dividends as some other companies, when compared to other tech companies, it can be a good option for a tech dividend stock.