After posting wildly successful earnings, the Meta (NASDAQ: META) board issued the social media company’s first dividend and announced a $50 billion share buyback. It was added to a list of dividend-paying mega-tech companies like Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Nvidia (NASDAQ: NVDA) is a dividend and yield race becoming a reason to own shares in America’s tech elite? If so, Apple, with its lagging stock, may want to boost its payout. Is Apple’s dividend safe?
Apple needs to do something to attract investors. While shares of Meta and Nvidia have surged and Microsoft has outperformed the market, Apple’s shares are flat this year. Its dividend is only mildly attractive at $.96, a .52% yield. Microsoft’s, at $3, is a .72% yield. These are five stocks with very high dividend yields.
Apple needs something to draw investors. While last quarter was the first in a year to show revenue growth, that growth was modest. Revenue rose 2% to $119.6 billion. EPS jumped 16% to $2.18.
iPhone revenue improvement was less than exciting. It rose from $65.8 billion a year ago to $69.7 billion in the most recent period. There had been worry that iPhone 15 sales might weaken from the pace of iPhone 14 and some earlier models. The earnings gave investors reason to worry less.
Apple’s disappointing news was from China, the world’s largest smartphone market by far. China’s smartphone ownership figure is over 900 million, well ahead of India and the US. Apple’s Greater China revenue dropped from $23.9 billion in the quarter last year to $20.8 billion in the most recent quarter.
Apple faces growing competition in China. Apple’s market share is about 17%, and several China-based companies follow that. Honor, OPPO, and vivo have over 16% market share. Toby Zhu, an analyst with research group Canalys, commented to Reuters, “Apple’s sales decline in China is not surprising given the strong competition it faced from local brands like Huawei and Xiaomi.”
If Apple’s revenues continue to grow modestly or even fall, what does it have to offer investors? As many American companies have done, it may need to increase its dividend.
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