When there's not much going on with AFB, like this Thanksgiving weekend, I spend some time reading, and occasionally responding to comments regarding the Apple-related articles on Seeking Alpha. One of the repeated comments I've seen on Seeking Alpha, and also on AFB, is that Apple's dividend is ridiculously low. For some reason, this comment by 121333 caused me to spend more time summarizing the dividend issue than I originally intended when I offered to *try* to "explain" to the user(an 82-year-old man...not that there's anything wrong with that
). I've included my SA comment at the bottom of this post.
As I appended to my comment on SA, I *may* have made math mistakes and won't be offended if they're pointed out.
Cheers to the AAPL Longs!!
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@121333 said:
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"Will somebody explain to me where all the dividends I’m getting .77 a share that’ really sucks will someone please explain I own 5000
Shares of t at about 5 percent apples div is lousy"
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***OK, let me *try* to explain.
1. T share price - Current Vs 5 years ago
12/01/19: $37.38/share
12/01/14: $33.94/share
2. AAPL share price - Current Vs 5 years ago
12/01/19: $267.25/share
12/01/14: $115/share
3. Consider $10,000 invested in each company on 12/01/14.
At $33.94/share, total shares in T would be 295
At $115/share, total shares in AAPL would be 87
4. Dividends over last 5 years - T
At approximately $.50/share dividend, T would pay: ~$.50/share*295 shares*4 times a year*5 years = *approximately* $2950 in dividends over the last 5 years.
5. Dividends over last 5 years - AAPL
At the range of $.47 to .77/share dividend, AAPL would pay *approximately* $1094.46 in dividends over the last 5 years.
6. The worth of each portfolio after 5 years, *not* including dividends
Value of T after 5 years = 295 shares*($37.38/share)=$11,027.10
Value of AAPL after 5 years = 87 shares*($267.25/share)=$23,250.75
7. Total Gain in each portfolio after 5 years, *including* dividends
Total Gain= Share Price Gain + (Dividends over 5 years)
T= $11,027.10+($2950)=$13,977.10 or +3,977.10 (+39%)
AAPL= $23,250.75+($1094.46)=$24,345.21 or +$14,345.21 (+143%)
Conclusion: T paid 2.6953 times the dividend paid by AAPL over the last 5 years but the *total return* from AAPL, considering the same amount invested in each stock 5 years ago, was 3.6069 times that of T.
*You* may consider AAPL's dividend "lousy" but most AAPL Longs are in for the *total return* over a relatively long period (years not weeks or months).
Disclaimer: I'm old so I *may* have made mistakes in my math. :-)
I won't be offended if anyone would care to point it out.
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