Neil Cybart expects Apple to hike buybacks by $75 billion

As for dividends, he's looking for $0.23 cash per share quarterly (up $0.01 or 5%).

From Cybart's "My Expectations for Apple’s Capital Management Changes" ($) posted Thursday to Above Avalon subscribers:

Later today, Apple will provide an update on its capital management strategy. We know Apple will increase its share buyback authorization and quarterly cash dividend...

Apple has increased its share buyback authorization each year in order to repurchase approximately $20B worth of shares a quarter. Apple has shown no signs of slowing its buyback pace at current price levels. Apple had $40.5B of buyback authorization remaining prior to 2Q22 and needs at least $80B over the next 12 months to continue buying back shares at the current pace of ~$20B each quarter.

As for the quarterly cash dividend, Apple’s past few increases have been stingy.

Here is Apple's quarterly cash dividend trajectory:

    • 2012: $0.095
    • 2013: $0.11 (16% growth)
    • 2014: $0.1175 (7% growth)
    • 2015: $0.13 (11% growth)
    • 2016: $0.1425 (10% growth)
    • 2017: $0.1575 (11% growth)
    • 2018: $0.1825 (16% growth)
    • 2019: $0.1925 (5% growth)
    • 2020: $0.205 (6% growth)
    • 2021: $0.22 (7% growth)
    • 2022 (estimated): $0.23 (5% growth)

The overall market has a dividend payout ratio of about 40%. Apple’s dividend payout ratio is just 14% and trending lower... Apple’s board can point to a few reasons for justifying such measly increases... A lower dividend payout ratio is also easier for Apple to sustain.

My take: So glad Cybart stays on top of this stuff.

5 Comments

  1. Daniel Epstein said:
    Well this is a short term prediction since we should know in about an hour or less. I think if the buyback is $75 Billion then the dividend increase should be a bit bigger. 5% is barely an increased cost to Apple if you think of the share buyback decrease since last year. Still the ratio of increasing the buyback compared to Dividend payout would be about 5 to 1 in this case.

    0
    April 28, 2022
  2. Dan Scropos said:
    This dividend raise sucks. There’s no other way to put it. Under-pacing THIS sort of inflation is callous.

    1
    April 28, 2022
    • Daniel Epstein said:
      Assuming you are talking about the 5% increase which has been announced. Apple is still in love with Buybacks (which is announced as 90 Billion) compared to Dividends. If they actually buyback the additional 90 Billion over the next year the Buyback is about 6X bigger cost revenue wise than the dividend. Between the two the annual cost is almost the same as predicted net profit.

      0
      April 28, 2022
  3. Bart Yee said:
    Apple reported today a dividend increase to $0.23 (in line with Cybart’s prediction) but it’s really only 4.5% increase.

    Apple also reported a $90B increased buyback authorization so we can see where Apple is currently focusing on for investor value enhancement. As I said in a previous post, IMO they could easily send $10B additional or out of this buyback for dividend increases close to double the previous dividend but that’s not gonna happen. Apple management is being conservative about dividend increases while being aggressive with share buybacks.

    2
    April 28, 2022

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