Does Apple Stock Pay Dividends?
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Does Apple stock pay dividends?
You may be surprised, but yes Apple (ticker symbol – AAPL) does indeed pay a dividend. In fact, the company has been raising their dividend for 9 consecutive years (as of 2021) … which is impressive.
Most dividend investors may point to blue chip companies like McDonald’s (MCD) or Procter & Gamble (PG) when it comes to quality dividend paying stocks.
While those are certainly some good choices, there are also plenty of great technology companies that are solid dividend payers too. This list would certainly include Apple (AAPL)!
Over the past 10 to 20 years, several technology companies (including Apple) have started paying a dividend while offering growth opportunities. These companies are some of the best dividend growth stocks available right now!
Let’s take a closer look at the Apple dividend.
Apple Dividend per Share
Apple’s current annualized dividend (2021) is $0.82 per share.
Their most recent dividend increase was announced last April (2020). This was a 6.49% annualized increase.
While the dividend increase was smaller than the past (see dividend growth rates below) … this announcement was made during the beginning of the global pandemic. Personally … that says a lot to me about the stability and potential growth for the company.
Note – The annualized dividend has been adjusted to account for the company’s 4:1 stock split last fall.
So while Apple does pay a dividend, the amount paid is actually quite small compared to the share price.
What does this mean?
While it can fluctuate day to day, depending on the share price, the current yield of the company is under 1.0%. This is one of the main reasons why Apple is often overlooked when it comes to investing in dividend paying stocks.
However, income investors looking for future yield will begin to factor in the the dividend growth rates of a company like Apple.
Higher dividend growth rates can offset a lower yield when it comes to building an income producing portfolio of stocks.
Apple Dividend Growth Rate
What makes Apple an attractive dividend stock?
The long term dividend growth rates and low dividend payout ratio are what first caught my attention.
Here is a look at some historical dividend growth rate averages of AAPL –
- 3 Year Dividend Growth Rate – 9.5%
- 5 Year Dividend Growth Rate – 9.7%
Over the past 3 years … Apple has managed to grow their dividend by an average of 9.5%.
Looking at 5 years, the company averaged 9.7% annual dividend growth.
So while your initial dividend income may be small from your AAPL shares … the company has given it’s shareholders almost a 10% raise for over the past 5 years!
Another dividend growth rate investors commonly use is the 10 year average. At the time of this writing, the company has only raised dividends for the past 9 years. So we will need to wait a bit longer for the 10 year average.
For a historical look at the growth, check out the AAPL dividend history.
Next, let’s look at how much of the company’s earnings are being used to pay their dividend.
Apple Dividend Payout
The dividend payout ratio of a stock is calculated by dividing a company’s annual dividends per share by the earnings per share (EPS) for the same period of time.
At the time of this writing (February 2021), Apple’s payout ratio was 25.1% … which is low. That means that for every $1 the company earns … it gives $0.25 back to it’s shareholders in the form of a dividend.
A payout ratio this low would imply the company has a good chance of continuing to raise it’s dividend.
Again, nothing is guaranteed … but most signs point to continued dividend growth for many years to come.
As a general rule of thumb … most dividend growth investors look for company’s with payout ratios under 60%.
So as you can see … the Apple dividend payout is a solid indicator of good things to come.
AAPL Dividend 2021
While there are no guarantees for the future, we know that the company is currently paying $0.205 per quarter.
Since the company currently pays a quarterly dividend (four times per year), we can assume the AAPL dividend for 2021 will be at least – $0.82.
What does this mean? For every 1 share of AAPL stock you own, you will receive $0.82 in dividends during 2021. So if you owned 100 shares … you get paid $82 just for owning those shares.
And even better … you still could see the value of your shares increase if the share price goes up throughout the year.
We can also assume that Apple will raise it’s dividend again in 2021. If so, that would be 10 years of consistent dividend raises.
If the company raised it’s dividend similar to last year’s 6.5% increase … then we could assume the annualized dividend to rise to about $0.87.
Or if the company followed their 3 year dividend growth trend of 9.5%, then we could see the annualized dividend increase to about $0.90.
While these increases may seem insignificant (they are only pennies after all) … compounding these types of increases year after year can help to accelerate your dividend income. That is the power of compounding interest … or in this case compounding dividends.
Dividend Paying Technology Stocks
Some of the best dividend growth stocks around come from technology companies … despite their low yields.
Dividend growth investors who ignore technology companies may be missing out on some wonderful opportunities.
Despite its low yield, Apple stock has shown that it can provide huge dividend growth year after year.
While these yearly increases may seem insignificant in the short term … over many years the growth compounds.
This is why I include companies like Apple (AAPL) in my dividend stock portfolio.
In addition to Apple, we also own the following technology companies – Microsoft (MSFT), Cisco (CSCO), Qualcomm (QCOM), and Intel (INTC). Each of these stocks pays us dividends every year. And all of them continue to raise their dividend every single year.
For more on how much we earn per year, check out our dividend income page. My wife and I have been earning dividend income since 2008 and track our results there.
Do you invest in low yield, high growth dividend stocks like Apple (AAPL)? What other technology companies that pay dividends do you own?