Apple Is Likely to Boost Dividend, Stock Buyback Plan


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Customers waited outside an Apple store in Miami Beach late last year because of the pandemic.


Daniel Slim/AFP via Getty Images


Apple

is getting ready to give back more money to shareholders.

As Wells Fargo analyst Aaron Rakers pointed out in a research note, Apple (AAPL) is likely to both boost its dividend and increase its stock-repurchase authorization when it reports its March quarter earnings on April 28. 

Rakers expects a dividend boost of at least 10%, which compares to increases of 6.5% last year and 5.5% the year before that. The company currently pays 20.5 cents per share quarterly, for a yield of 0.6%.

Apple will expand its stock repurchase program by $50 billion, Rakers said, after exiting the December quarter with $32.4 billion remaining on its previous authorization. That would match the $50 billion authorization announced a year ago.

Rakers noted that since the last Apple capital return update in April 2020, Apple has repurchased $57.9 billion of stock and paid out $10.8 billion in dividends, resulting in a slight reduction in its cash position to $81.13 billion from $83.34 billion. He noted that Apple generated $35.3 billion in free cash flow in the latest quarter, a record for the company, with free cash flow of $80.2 billion for the trailing 12 months.

“Our positive view on Apple’s continued ability to generate strong free cash flow supports our view that the company could return its annual dividend growth trajectory into the double-digit percentage range,” he wrote.

On Monday, Apple stock was up 0.6%, to $134.92.

Write to Eric J. Savitz at eric.savitz@barrons.com