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Apple’s dividend growth has been strong.
Apple’s accelerated dividends can be positive for income investors. The company increased its dividend per share from 2012 to 2011. In that time, shareholders saw their dividends grow more than eightfold.
Earnings per share went up from $1.58 to $5.61. It’s crucial to have earnings to sustain a payment. Apple’s quality earnings growth is a good sign for the future of dividends.
Its earnings are boosted by continued innovation in its products, like the iPad. The services segment made up 20% of revenue in the most recent quarter, which ended March 26. The rise of the services segment is important because it generated a gross profit margin that was higher than its products.
YCharts has data on AAPLPayout ratio.
There’s plenty of room for Apple’s yield to increase when you consider the company’s payout ratio. This is the amount of earnings that were paid out in dividends. Apple’s dividendPayout ratio was 14.5%, so the company could increase its dividend payment even if earnings remained constant, or if profits decreased. The lower the percentage, the more wiggle room a company has in its dividends.
Apple’s stock is not very expensive.
Apple’s P/E and P/FCF ratios are slightly above average over the past five years. In the last five years there were times when Apple was more expensive and times when it was cheaper.
The AAPL P/E ratio data is provided by YCharts.
A comparison is a way to measure valuation. Apple sells at a discount compared to Microsoft. It isn’t an apples-to-apples comparison, but Microsoft is a big tech stock with a mix of hardware and software revenue.
Income investors who buy Apple stock today will appreciate it 10 years from now. Yes, Apple is an excellent stock to buy.
There are positions in Apple held by Parkev Tatevosian. There are positions in Apple and Microsoft that the Fool recommends. The long March 2023 $120 calls on Apple and the short March 2023 $130 calls on Apple are recommended by The Motley Fool. The disclosure policy of The Motley Fool is 30.
Parkev Tatevosian is employed in Apple. Apple and Microsoft are both recommended by The Motley Fool. The long March 2023 $120 calls on Apple are recommended by The Motley Fool. The disclosure policy of The Motley Fool is outlined.