Apple Inc. (AAPL) To Distribute $3B In (Ex) Dividends

Apple Inc. (AAPL) To Distribute $3B In (Ex) Dividends

Those who have held Apple Inc. (NASDAQ:AAPL) since its fall from grace when it reached its high last September will have additional reason to celebrate next week. In addition to the stock making a steady rise since Apple Inc. (NASDAQ:AAPL)’s last earnings report, shareholders will see Apple distributing a record quarterly dividend of $3.05 on Thursday.

Apple Inc. (AAPL) To Distribute $3B In (Ex) Dividends

Newer Apple investors will have needed to make their purchases by the close of the markets, in this case the NASDAQ, this last Wednesday in order to be considered “shareholders of record” and receive their dividend payment.

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Apple Inc. (NASDAQ:AAPL)’s “Ex-Dividend” explained

The delay was explained to Apple Insider by Philip Elmer-Dewitt last quarter—it is due to an accounting principle know as the “ex-dividend” or reinvestment date, which determines the party owed the dividend when shares change ownership immediately before the dividend is paid. When a share is sold, the transaction does not “settle” for three days.

The NASDAQ, on dividend payment days, automatically revalues the company’s stock by the dividend price owing to the fact that dividends are paid from company’s cash on hand. Given Apple’s stock buyback program, investors shouldn’t see to much change in the stock price given the growing scarcity of Apple’s stock when it takes them off the market.

Over the past year, Apple has been averaging a pay out in dividends each quarter of $2.8 billion. Last quarter this number jumped to $2.8 billion when Apple decided to increase the dividend by 15 percent. Presently, there are 908.4 million shares of Apple outstanding.

Apple Inc. (NASDAQ:AAPL) buy back frenzy

Last year, Apple announced its expanded capital return program to mixed reviews. Many felt that the program was too stringent and that Apple should reserve the right to buy back shares when appropriate rather than simply guaranteeing that it was in the offing. Part of this expanded capital return program was the raising of the dividend from $2.65 to $3.05, the company also added $50 billion to its buyback program.

Given a stock price that Apple hadn’t seen in quite some time, it went on a buy-back frenzy last quarter taking 36 million shares off the market at an average price of $444.44. Apple Inc. (NASDAQ:AAPL) will spend $44 billion more in buybacks by the end of 2015.

With Apple Inc. (NASDAQ:AAPL) trading at $460 per share, it saved itself nearly $600 million by buying and essentially destroying its stock last quarter. Additionally, by “destroying” 36 million shares it has saved itself $109 million in dividend payments.

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While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. <i>To contact Brendan or give him an exclusive, please contact him at [email protected]</i>
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