April 12, 2025 a 10:46 am
AAPL: Dividend Analysis - Apple Inc.
📊 Apple Inc. (AAPL) stands as a prominent player in the technology sector, offering investors both growth and income potential through its dividend program. The company's consistent dividend history over 23 years highlights its commitment to returning value to shareholders. Despite a relatively modest dividend yield, Apple's substantial market capitalization and stable financial health support its dividend sustainability.
Overview
| Metric | Details |
|---|---|
| Sector | Technology |
| Dividend Yield | 0.44% |
| Current Dividend per Share | $0.99 |
| Dividend History | 23 years |
| Last Cut or Suspension | None |
Dividend History
🗣️ The lengthy dividend history indicates a strong commitment towards shareholder returns. Consistent dividend payments, reinforced by a stable financial base, build investor confidence and provide a revenue stream that is attractive for long-term investors.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | $0.25 |
| 2024 | $0.99 |
| 2023 | $0.95 |
| 2022 | $0.91 |
| 2021 | $0.865 |
Dividend Growth
📈 The dividend growth rate offers insights into a company's capability to enhance shareholder returns. Apple's dividend growth over 3 and 5 years shows a trend of moderate yet consistent growth, appealing for those looking at long-term income increases.
| Time | Growth |
|---|---|
| 3 years | 4.60% |
| 5 years | 5.43% |
The average dividend growth is 5.43% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio
📉 The payout ratio offers insight into how much of the earnings are distributed as dividends. Important for sustainability, this ratio helps assess how well the dividend is covered by earnings and free cash flow.
| Key Figure | Ratio |
|---|---|
| EPS-based | 15.57% |
| Free cash flow-based | 15.17% |
✅ With a low EPS payout ratio of 15.57% and a similar free cash flow payout, Apple's dividend seems well-covered, signaling strength in ongoing dividend payments.
Cashflow & Capital Efficiency
📊 Analyzing cash flow metrics provides transparency on liquidity and operating efficiency, essential for assessing dividend sustainability and reinvestment capabilities.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Free Cash Flow Yield | 4.57% | 3.69% | 3.11% |
| Earnings Yield | 4.09% | 3.60% | 2.68% |
| CAPEX to Operating Cash Flow | 8.77% | 9.91% | 7.99% |
| Stock-based Compensation to Revenue | 2.29% | 2.83% | 2.99% |
| Free Cash Flow / Operating Cash Flow Ratio | 91.23% | 90.08% | 92.01% |
The steady free cash flow relative to operating metrics indicates robust operational cash generation, supporting Apple's capacity to maintain or grow dividends.
Balance Sheet & Leverage Analysis
🗣️ A solid balance sheet with manageable leverage ratios is crucial for long-term financial health and stability, impacting both debt servicing and dividend security.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Debt-to-Equity | 2.61 | 1.79 | 1.87 |
| Debt-to-Assets | 37.56% | 31.51% | 29.22% |
| Debt-to-Capital | 72.33% | 64.13% | 65.19% |
| Net Debt to EBITDA | 0.83 | 0.64 | 0.57 |
| Current Ratio | 0.88 | 0.99 | 0.92 |
| Quick Ratio | 0.85 | 0.94 | 0.83 |
| Financial Leverage | 6.96 | 5.67 | 6.41 |
⚠️ While leverage ratios are on a downward trajectory, maintaining flexibility and ensuring the ability to secure funding at attractive rates remains key for Apple’s ongoing strength.
Fundamental Strength & Profitability
📈 Apple's strong fundamental ratios highlight compelling profitability metrics. These indicators are important to assess earnings quality and growth potential.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Return on Equity | 197.96% | 156.08% | 164.59% |
| Return on Assets | 28.29% | 27.51% | 25.68% |
| Margins | 25.31%/43.31%/29.29% | 25.31%/44.13%/32.83% | 23.97%/46.21%/34.43% |
| Research & Development to Revenue | 6.66% | 7.80% | 8.02% |
✅ Consistent high returns on equity and assets indicate strong management efficiency and strategic investment. The investment in R&D reflects ongoing innovation contributing to competitive advantage.
Price Development
Dividend Scoring System
| Category | Score | |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 4 | |
| Dividend growth | 4 | |
| Payout ratio | 5 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 33/40
Rating
📊 In conclusion, Apple's well-rounded financial metrics, together with modest yet reliable dividend growth, signify a strong investment opportunity for dividend-focused investors. The company's strategic growth in dividends paired with robust cash flow management and prudent balance sheet practices provide a safe yet growth-oriented investment avenue. AAPL remains a vibrant choice for those valuing stability supplemented with potential moderate growth.