Apple pays dividends, but the amount per share is modest compared to the stock price

Yes, Apple Inc. (ticker: AAPL) pays dividends to shareholders who own the stock. As of early 2024, Apple pays a quarterly dividend of $0.24 per share, which works out to $0.96 per share annually. That means if you own 100 shares, you receive $96 per year in four separate payments, one each quarter.

The dividend yield — what you earn as a percentage of the stock price — is typically between 0.4% and 0.6%, depending on Apple's current share price. This is lower than the yield on many other large companies, and much lower than bonds or savings accounts. Apple prioritizes returning cash to shareholders through stock buybacks rather than dividends, so the dividend is a secondary income stream, not the main reason to own the stock.

Key Takeaways

  • Apple's quarterly dividend is $0.24 per share, paid four times a year in roughly equal installments.
  • The annual dividend yield on Apple stock is typically under 1%, so dividends are a small part of total shareholder returns.
  • Apple has raised its dividend every year since it resumed paying dividends in 2012, though the increases are usually modest.
  • You must own the stock before the ex-dividend date to receive the next quarterly payment; the date changes each quarter.
  • Dividends are taxed as ordinary income in a regular brokerage account, but may be taxed more favorably in a retirement account.

When Apple started paying dividends and why

Apple did not pay dividends for most of its history as a public company. The company resumed dividend payments in August 2012, starting with $2.65 per share paid annually. At that time, Apple had accumulated enormous cash reserves — over $100 billion — and faced shareholder pressure to return some of that cash rather than hold it indefinitely.

The decision to pay dividends reflected a shift in Apple's strategy. The company had grown so large that reinvesting all profits into the business no longer made sense. Instead, management chose to return cash through two channels: dividends and stock buybacks. Buybacks have historically been the larger of the two, but dividends signal stability and appeal to investors who want steady income from their holdings.

How the dividend payment schedule works

Apple pays dividends quarterly, meaning four times per year. The payment dates vary slightly year to year, but typically fall in February, May, August, and November. The company announces each dividend about a month before the payment date, along with the ex-dividend date — the date by which you must own the stock to receive that quarter's payment.

If you buy Apple stock after the ex-dividend date, you will not receive the upcoming dividend; instead, the previous owner receives it. If you sell the stock before the ex-dividend date, you forfeit the upcoming dividend. The ex-dividend date is usually two business days before the official record date, which is when the company's books close to determine who owns shares.

The dividend arrives in your brokerage account automatically if you own shares on the record date. You do not need to do anything to receive it. If you own fractional shares through a dividend reinvestment plan (DRIP), the dividend buys additional fractional shares at the closing price on the payment date.

How Apple's dividend compares to other tech stocks

Among large technology companies, Apple's dividend yield is moderate. Microsoft pays a similar yield (around 0.7% to 0.9%), while Alphabet (Google) and Amazon do not pay dividends at all. Nvidia, another major tech stock, pays a very small dividend with a yield under 0.1%.

Outside technology, many mature companies in utilities, consumer staples, and finance pay much higher yields — often 2% to 5% or more. If dividend income is your primary goal, Apple is not the best choice. But if you want a mix of potential stock price growth and modest income, Apple fits a different profile than pure growth stocks like Amazon or pure income stocks like utility companies.

Tax treatment of Apple dividends

In a regular taxable brokerage account, Apple dividends are taxed as may have access to dividends if you have owned the stock for more than 60 days around the ex-dividend date. may have access to dividends are taxed at the long-term capital gains rate, which is 0%, 15%, or 20% depending on your income level — lower than the ordinary income tax rates that explore to wages or interest.

In a retirement account such as an IRA or 401(k), you do not pay tax on dividends when you receive them. The tax is deferred until you withdraw money from the account. This makes retirement accounts particularly efficient for dividend-paying stocks if you plan to hold them for many years.

If you reinvest dividends through a DRIP, you still owe tax on the dividend in the year you receive it, even though you did not take the cash. Keep records of all dividend payments for tax reporting purposes.

How dividend increases work at Apple

Apple has increased its dividend every year since 2012. The increases are usually announced in the spring and take effect later that year. Recent increases have ranged from 3% to 5% per year, though the exact percentage varies.

These increases reflect Apple's strong cash flow and the company's commitment to returning more cash to shareholders over time. However, the increases are gradual, not dramatic. If you are counting on Apple dividends to grow significantly year to year, you will be disappointed. The dividend is meant to be stable and predictable, not a source of rapid income growth.

What happens to your dividend if you own Apple through a fund or ETF

If you own Apple stock indirectly through a mutual fund or exchange-traded fund (ETF), the fund receives the dividend on your behalf. Most funds automatically reinvest dividends back into the fund, buying more shares at the net asset value. Some funds allow you to choose between reinvestment and cash distribution, depending on the fund's rules.

The tax treatment depends on the account type. In a taxable account, you owe tax on the dividend whether the fund reinvests it or pays it to you in cash. In a retirement account, dividends are not taxed until withdrawal. Check your fund's prospectus or contact your brokerage to understand how your specific fund handles dividends.

Frequently Asked Questions

What is Apple's current dividend per share?

As of early 2024, Apple pays $0.24 per share quarterly, or $0.96 annually. This amount changes periodically when Apple announces increases, typically in the spring. Check Apple's investor relations website or your brokerage for the most current rate.

Do I have to reinvest Apple dividends or can I take the cash?

You can choose either option. Most brokerages let you set your dividend preference in your account settings — either reinvest automatically (DRIP) or receive cash. You can change this setting at any time, though the change takes effect for future dividends, not past ones.

If I buy Apple stock on the ex-dividend date, do I get the dividend?

No. You must own the stock before the ex-dividend date to receive that quarter's dividend. If you buy on or after the ex-dividend date, you will receive the next quarterly dividend instead. The ex-dividend date is announced when the dividend is declared.

Is Apple's dividend yield higher or lower than the stock market average?

Apple's yield is lower than the overall stock market average, which is typically around 1.5% to 2%. Apple's yield of under 1% reflects the fact that the company prioritizes buybacks and growth over income. If you want higher dividend income, you may need to look at other sectors or individual stocks.

Can I lose money on Apple stock if I own it for the dividend?

Yes. The dividend is separate from the stock price. Apple's share price can fall, and that loss would outweigh any dividend income you receive. Dividends reduce your losses but do not prevent them. Own Apple stock only if you believe the company's long-term prospects are sound, not solely for the dividend income.