From Eric Savitz’s “Apple Is Likely to Boost Dividend, Stock Buyback Plan” posted Monday on Barron’s:
As Wells Fargo analyst Aaron Rakers pointed out in a research note, Apple (AAPL) is likely to both boost its dividend and increase its stock-repurchase authorization when it reports its March quarter earnings on April 28.
Rakers expects a dividend boost of at least 10%, which compares to increases of 6.5% last year and 5.5% the year before that. The company currently pays 20.5 cents per share quarterly, for a yield of 0.6%.
Apple will expand its stock repurchase program by $50 billion, Rakers said, after exiting the December quarter with $32.4 billion remaining on its previous authorization. That would match the $50 billion authorization announced a year ago.
“Our positive view on Apple’s continued ability to generate strong free cash flow supports our view that the company could return its annual dividend growth trajectory into the double-digit percentage range,” he wrote.
Maintains Overweight rating and $155 price target.
My take: Music to shareholders’ ears, but how does he know?