Analyst Expects Apple To Hike Dividends By At Least 10% When Reporting Q2 Earnings

Wells Fargo analyst Aaron Rakers expects Apple Inc. AAPL to announce a dividend increase of at least 10% as well as its expand its stock buyback program by $50 billion while reporting its second-quarter results on April 28, Barron’s reported Monday.

What Happened: Rakers said in a research note that he expects Apple to boost its dividend by at least 10%, reflecting significant free cash flow generation, as reported by Barron’s. Apple’s free cash flow generation hit a record $35.3 billion in the preceding first quarter.

The increase in the dividend to about $0.90 per share on an annualized basis would represent the highest dividend increase since 2018 when Apple announced a 16% dividend increase, the analyst noted. The iPhone maker had declared a dividend of 20.5 cents per share in the preceding holiday quarter.

Rakers also reportedly expects the Cupertino-based tech giant to expand its stock repurchase program by at least $50 billion after it exited the December quarter with $32.4 billion remaining on its previous authorization.

Rakers noted that Apple has repurchased $57.9 billion of stock and paid out $10.8 billion in dividends since its last capital return update in April 2020, as per the report. Apple said it returned over $30 billion to shareholders during the first quarter.

See Also: Apple's 'Spring Loaded' Event Is Tuesday: Analysts Expect iPad Refreshes, AirTags, AirPods 3 And More

Why It Matters: Apple has thrived despite the pandemic. In January, the company reported first-quarter results that came in well ahead of estimates, with iPhone, wearables and Services all ringing in record revenues. Revenues grew 21.4% year-over-year and topped the $100 billion mark for the first time ever.

The tech giant is the biggest listed public company in the U.S. with a market capitalization of $2.27 trillion.

Price Action: Apple shares closed almost 0.6% higher on Monday at $134.94.

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