Apple is one of the biggest companies on the planet but now, there is a new title within its ranks. The American smartphone maker is now the biggest dividend payer in the planet. Its quarterly dividend payout has risen by 10.5% with shareholders now taking home 63 cents per share. Data from Howard Silverblatt, one of the senior Index analysts at the S&P Dow Jones Indices LLC shows that Apple has now surpassed Exxon Mobil in dividend payouts with nearly $13.2 Billion in annual distribution. Just to show you how massive Apple has leaped in terms of dividend payments, as we speak, the smartphone maker is paying more quarterly dividend payments than the entire market capitalization of US steel.
Even though US steel hasn’t been growing as rapidly as the tech space, it’s still a huge sector in America. If indeed Apple goes ahead and pays the announced dividend this month, it will set a new record as the highest ever dividend payout in a month in the S&P 500. The phone company is expected to pay as much as $51.6 billion this month. It seems Apple is stopping at nothing to return all its profits back to the shareholders. In addition to the dividend payouts, shareholders will have something more to smile about.
The smartphone maker said that it will be buying back its own shares using a cache of nearly $35 billion. The company plans a share purchase totaling $210 billion, which to be fair is a huge amount. In the process, this buyback will play a critical role in increasing the value of Apple’s shares in the market. The strategy has been used by other big companies and it works. Either way, no matter how you look at it, the bottom line is that there hasn’t been a better time to be an Apple shareholder than now.
So, why would Apple buy back its shares? In such a cash tight business environment, where on earth will the company get the money? Well, nothing to be worried about here. At the moment, the phone maker is sitting on the largest pile of disposable income in the world. Apple has about $257 billion to spare, and this is actually double the amount Microsoft has at its disposal. With such figures, you can start to see why it wouldn’t be a problem for the smartphone company to buy back its stock.
The Apple stock has done well this year. The share price lost 1.1% in value after the company missed its revenue targets but even then, it gained 27% this year alone. For many shareholders, the 1.1% drop in share prices is simply a drop in the ocean of what has already been an overall great year for the smartphone maker. The gains so far this year are four times better than the S&P average. It will be interesting to see just how consistent Apple will be on its dividend payments or if indeed there is a company out there that will challenge its number one status as far as dividend payments go.