After announcing outstanding financial results, Meta (NASDAQ: META) management declared its first-ever dividend payment in the company’s history and introduced a $50 billion share buyback program. By doing so, it joined the ranks of technology companies such as Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Nvidia (NASDAQ: NVDA) that pay dividends. Is the competition in dividends and investment returns becoming a reason to own shares of the tech elite in the United States? If so, Apple may want to increase its dividend payout. But is Apple’s dividend safe?
Apple needs to do something to attract investors. While Meta and Nvidia stocks have risen and Microsoft has outperformed the market, Apple’s shares have remained flat this year. Apple’s dividend is only moderately attractive, at $0.96 with a dividend yield of 0.52%. In contrast, Microsoft’s dividend is $3, which translates to a dividend yield of 0.72%. Both companies offer high dividends.
Apple needs something to entice investors. In the last quarter, revenue growth was modest but reached $119.6 billion, a 2% increase. Earnings per share increased by 16% to $2.18.
However, the revenue growth related to the iPhone proved to be less exciting. It rose from $65.8 billion last year to $69.7 billion in the most recent period. There is concern that iPhone 15 sales may weaken compared to the pace of iPhone 14 sales and several previous models. However, the financial results reassured investors.
The most disappointing news was the decline in revenues from China, the largest smartphone market in the world. The number of smartphone users in China exceeds 900 million, much more than in India and the United States. Revenues from the Greater China region dropped from $23.9 billion in the previous quarter to $20.8 billion in the most recent period.
Apple faces growing competition in China. Apple’s market share is about 17%, while several local companies have a similar value. Honor, OPPO, and vivo have over 16% market share. Toby Zhu, an analyst at research group Canalys, commented to Reuters, “Apple’s decline in China is not surprising, given the strong competition from local brands like Huawei and Xiaomi.”
If Apple’s revenues continue to moderately grow or even decline, what can it offer investors? Like many American companies, Apple may need to increase its dividend payout to attract investors.
Meta announces its first-ever dividend payment
Meta’s management announced its first-ever dividend payment in the company’s history of social media. As part of the $50 billion share buyback program, Meta joins other technology companies that also pay dividends, such as Apple, Microsoft, and Nvidia.
Apple’s stock remains unchanged
While Meta and Nvidia stocks are rising and Microsoft is outperforming the market, Apple’s stock remains flat this year. Apple’s dividend is moderately attractive at 0.52%.
Apple’s revenue growth was modest
In the last quarter, Apple’s revenue increased by 2% to reach $119.6 billion. Earnings per share increased by 16% to $2.18.
iPhone sales may weaken in China
Despite positive financial results, there is concern about the sales of iPhone 15, which may be weaker than the previous model. Revenues from China dropped from $23.9 billion in the previous quarter to $20.8 billion in the most recent period.
Competition in China
Apple faces growing competition in the Chinese smartphone market. Apple’s market share is about 17%, while local companies such as Honor, OPPO, and vivo have a similar market share. Strong competition from local brands like Huawei and Xiaomi may impact Apple’s sales decline in China.
Summary
In the face of competition and relatively modest revenue growth, Apple may need to increase its dividend payout to attract investors.
Key terms:
– Dividend: A portion of a company’s profits distributed to its shareholders.
– Stocks: Partial ownership of a company that can be acquired to participate in its profits and losses.
Suggested related links:
– https://www.apple.com (Apple’s homepage)
– https://www.microsoft.com (Microsoft’s homepage)
– https://www.nvidia.com (Nvidia’s homepage)
The source of the article is from the blog queerfeed.com.br