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Apple, Inc. shares reach new peak above $114 after paying investors $2.9 billion in dividends

Apple shares reached a new all time closing high of $114.18 today, following yesterday's quarterly dividend distribution of $2.9 billion to shareholders. That compares to a pre-split adjusted price just cents below $800, and is 53.5 percent higher than the company's stock price just one year ago.

AAPL MSFT GOOG Stock 2014


Since the start of 2014, Apple shares are up 42.46 percent, compared to Microsoft's 32.53 percent gain or Google's 2.75 percent decline in nonvoting GOOG C class shares and 1.02 percent decline in standard GOOGL A class shares. Google split its shares into the two classes and awarded investors one of each, effectively stripping investors of half their voting rights through the "dividend" dilution.

Apple's record high stock price allows the company to attract and retain top talent through stock based compensation.Apple's record high stock price allows the company to attract and retain top talent through stock based compensation

Stock prices can take irrational turns in the short term, such as when investors sent Apple's shares below $12 (split adjusted) in 2008 on fears that the company would lose its customers due to price sensitivity during the global economic downturn. After recovering the next year and reaching regular new highs through 2012, Apple shares again tanked in 2013 as pundits worried about the company's growth prospects.

Few are worried this year, as iPhone 6 models set new records while Macs reach their highest ever sales volumes, converting the company's PC growth from lower priced iPads into higher margin MacBooks and iMacs.

The company also launched Apple Pay to much fanfare, resulting in billions of dollars in free publicity as every major bank and many large retailers and restaurant chains in the U.S. have been constantly advertising iPhone 6 and Apple Pay features.

AAPL Dividends



Yesterday November 13, Apple paid shareholders its quarterly dividend of $0.47 per share across the 5.87 billion shares outstanding, a total payout of $2.9 billion. According to the 2014 U.S. dividend outlook report by Markit, Apple will narrowly beat out Exxon Mobil to be S&P's largest dividend payer of the year.

Apple has been paying its shareholders a dividend about a month and a half after the end of each fiscal quarter ever since it declared its modern dividend plan in the summer of 2012.

The November dividend is the second to occur since the company issued its 7-for-1 stock split. That split also converted the dividend from $3.29 per share to 47 cents per share.

Over the previous quarter, Apple has repurchased a surprising $17 billion of its own stock at average share prices ranging from $96.77 to $100.64.

AAPL Buybacks



Dividends are a minority portion of Apple's shareholder capital return program, the majority of which has been earmarked for buying back outstanding shares.

Buybacks increase the scarcity, and therefore value, of Apple's stock by taking shares off the market and retiring them. Removing shares from circulation also enhances the company's closely-watched earnings per share metrics.

Over the past year, Apple has paid out $11 billion in dividends to its shareholders, distributing about $2.8 billion every quarter. "The Company also plans to increase its dividend on an annual basis, subject to declaration by the Board of Directors," Apple states in its 10-K filing.

Apple has spent $68 billion on stock buybacks since initiating its capital return program, including an opportunistic $14 billion share grab initiated after the stock plunged more than 8 percent in January following the company's holiday Q1 release which detailed its highest ever quarterly revenues and operating profits--results that the tech media depicted as "disappointing."

Apple's most recent quarter of buybacks incorporated a record $8 billion in open market purchases and a fourth Accelerated Share Repurchase arrangement involving and additional $9 billion.