Apple Inc. Dividend Announcement: Financial Analysis and Strategy

This report analyzes Apple Inc.'s dividend policy, focusing on a recent dividend announcement of $0.75 per share. It examines the company's dividend history, payout ratio, and earnings per share, noting a slight decrease in the payout ratio, suggesting a strategic reinvestment of internal funds. The analysis suggests that Apple's management is prioritizing internal funding for operations over external debt or equity to mitigate financial risks. The report concludes that this decision reflects a prudent approach, considering factors like increased competition and technological changes. The appendix includes supplementary information like the dividend payout ratio and schedule.

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Table of Contents
Apple Incorporation...................................................................................................................2
Introduction............................................................................................................................2
Corporate Announcements.....................................................................................................2
Conclusion and Recommendations........................................................................................2
References..................................................................................................................................4
Appendix....................................................................................................................................5

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Apple Incorporation
Introduction
Apple Company designs, manufactures and markets various types of mobile and
media devices to the consumers. It also sells integrated software’s, various networking
solutions, services and various other applications. The company has a global presence and is
one of the leading market shareholder in the industry.
Corporate Announcements
The firm announced a dividend of $0.75 per share payable and the dividend was
declared on Jan 29, 2019. Apple Incorporation has maintained a legacy of paying dividend
since the year 1990. 1.54% is the current dividend yield of the company which the company
has tried to maintain the same for a consecutive of five-years. The Earnings Per Share for the
company in the current year was around $4.18 and the dividend was around $0.75. The pay-
out ratio for the company is around 17.87% which is comparatively less than the last year’s
pay-out ratio (Apple - Investor Relations - Financial Information - Dividend History, 2019).
Conclusion and Recommendations
The current financial performance of the company has been stable with firm’s
financial position and profitability increasing consistently. The third quarter for the company
has been pretty well where the Earnings per share for the company rose significantly from
$2.34 to $4.18. However on the other hand side the firm has reduced the pay-out ratio of the
firm thereby reinvesting the internal funds into the operation which has been the key
management strategy of Apple Incorporation. The message sent by the announcement of
reduced pay-out ratio has been because of applying and usage of internal funds for the
operations rather than debt or equity source to reduce the financial risk and leverage of the
company. Yes, the decision of the management has been good where the company has

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considered various business factors like rising competition, technological changes and
various other macro-economic conditions that might affect the operations of the company
(Share, 2019).

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References
Apple - Investor Relations - Financial Information - Dividend History. (2019). Retrieved
from https://investor.apple.com/investor-relations/financial-information/dividend-
history/default.aspx
Share, A. (2019). dividend news display - DividendInvestor.com. Retrieved from
https://www.dividendinvestor.com/dividend-news/20180731/dividend-announcement-
apple-inc-nasdaq-aapl-on-07-31-2018-declared-a-dividend-of-$0.7300-per-share/

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Appendix
1) Dividend Pay-out Ratio of Apple Incorporation.
2) Dividend Schedule of Apple Incorporation