Friday, March 23, 2012

Apple will Pay a Dividend to its Shareholders

Apple (AAPL) has become the most valuable company in the world. It will start paying a dividend of $2.65 per share, each quarter, starting July 1. The yield will be about 1.8%, which is lower than dividend yields of Microsoft (MSFT) and Hewlett Packard (HPQ). Dividends are a nice way for shareholders to get some extra money out of an investment, but the dividend numbers are dwarfed by the percentage rise of the Apple stock. Apple's shares have rocketed upwards an amazing 45% this year. The 52 week range for Apple has been between $310 and $609, and the current price is $596. Ten years ago it was $12 per share. Five years ago it was $92. Owning this stock is a no-brainer, but at $600 per share, how many people will go and buy 10 shares? That scares a lot of people away. Microsoft seems more attainable for the masses, at $32 per share. I wonder if Apple would consider a stock split?

Earlier today, Apple's stock dropped 9% and the trading was stopped due to volatility circuit breaker regulations. It looks like the wild swing was due to a computerized trading error that affected stocks with symbols between A through BF. The BATS exchange issued the trades and they blamed it on a software error. More and more stock trades these days are executed via computer programs, which use logarithms to track the most minute moves in stock prices.

The key to Apple's success over the past 5 years or so have been its innovations, like the i-pod, i-pad and i-phone. But, with Steve Jobs gone, one has to wonder what else they have up their sleeve as far as new ideas.

* Some information from

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