Long Term Dividend Growth

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    Posted: 20 April 2012 12:43 PM #106

    OK so I looked at another stock GE.  YOu will love this one.

    in 1993 it was issuing a dividend of .0525 a share.  The increases stopped in 2009 at .31 a share.  Thats a 600% increase in 16 years.

    In the mean time the stock has split three times.  Two times 2:1 and one time 3:1.

    So that .0525 has turned into $3.78 by 2009 for those who just held the stock and took advantage of the splits..  That my friends is an increase of 7300%.

    Dividends with Apple may give us better returns regardless of what the stock does in 16 years.

         
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    Posted: 20 April 2012 02:45 PM #107

    Red Shirted Ensign - 20 April 2012 04:49 AM

    ... I have some other deep ITM calls I will probably exercise later this year to build up a cash flow strategy whereby I will buy calls with the dividend and repeat the exercise over the next five years until I get to your target price of $3000.

    Then I will stop.

    Stop copying my strategy :-x.

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    Posted: 20 April 2012 02:58 PM #108

    omacvi - 20 April 2012 03:43 PM

    in 1993 it was issuing a dividend of .0525 a share ... turned into $3.78 by 2009 ...

    Growth 30.7%.  At this growth rate, in five years, dividend for AAPL would be $40.43 per year per share.  By 2020, $90.26 per year per share.  For 1,000 shares, would get $90,260 per year in dividend, pay of a software project manager in SV.

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    Posted: 20 April 2012 04:08 PM #109

    Mace - 20 April 2012 05:58 PM
    omacvi - 20 April 2012 03:43 PM

    in 1993 it was issuing a dividend of .0525 a share ... turned into $3.78 by 2009 ...

    Growth 30.7%.  At this growth rate, in five years, dividend for AAPL would be $40.43 per year per share.  By 2020, $90.26 per year per share.  For 1,000 shares, would get $90,260 per year in dividend, pay of a software project manager in SV.

    I have a plan that will give me close to $1 million a year in dividends by 2032.

    Buy and Hold

    The dividend growth combined with stock appreciation makes aapl the best investment one can possible have.

         
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    Posted: 20 April 2012 07:00 PM #110

    Mace - 20 April 2012 05:45 PM
    Red Shirted Ensign - 20 April 2012 04:49 AM

    ... I have some other deep ITM calls I will probably exercise later this year to build up a cash flow strategy whereby I will buy calls with the dividend and repeat the exercise over the next five years until I get to your target price of $3000.

    Then I will stop.

    Stop copying my strategy :-x.

    LOL  let’s both gain from it…

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    Posted: 20 April 2012 10:54 PM #111

    Mace - 20 April 2012 05:58 PM
    omacvi - 20 April 2012 03:43 PM

    in 1993 it was issuing a dividend of .0525 a share ... turned into $3.78 by 2009 ...

    Growth 30.7%.  At this growth rate, in five years, dividend for AAPL would be $40.43 per year per share.  By 2020, $90.26 per year per share.  For 1,000 shares, would get $90,260 per year in dividend, pay of a software project manager in SV.

    A software project manager in Silicon Valley makes only $90,260 per year? Seems low for today, let alone in 2020.

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    Posted: 20 April 2012 11:28 PM #112

    Apple II+ - 21 April 2012 01:54 AM
    Mace - 20 April 2012 05:58 PM
    omacvi - 20 April 2012 03:43 PM

    in 1993 it was issuing a dividend of .0525 a share ... turned into $3.78 by 2009 ...

    Growth 30.7%.  At this growth rate, in five years, dividend for AAPL would be $40.43 per year per share.  By 2020, $90.26 per year per share.  For 1,000 shares, would get $90,260 per year in dividend, pay of a software project manager in SV.

    A software project manager in Silicon Valley makes only $90,260 per year? Seems low for today, let alone in 2020.

    Maybe he meant take home pay after paying their $4K/month studio in downtown SanFran.

         
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    Posted: 20 April 2012 11:31 PM #113

    Hey guys please don’t talk about how many shares you want to buy or how much a software engineer is making.

    Please talk about the dividend growth potential backed up with data.

    Thank You

         
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    Posted: 21 April 2012 10:07 PM #114

    omacvi - 21 April 2012 02:31 AM

    Hey guys please don’t talk about how many shares you want to buy or how much a software engineer is making.

    Please talk about the dividend growth potential backed up with data.

    Thank You

    David Fish has a great spreadsheet about dividend paying companies and it shows the rate of dividend growth for 1, 5 and 10 years at his website
    http://dripinvesting.org/Tools/Tools.asp
    Use the Excel spreadsheet under U.S. Dividend Champions.

    That said, I think we are throwing darts to try to project a dividend growth rate for Apple right now. Not enough data points and the companies one might use as comparisons don’t seem a close comparison right now. Apple’s growth rate is scorching and I cannot think of a good match, even IBM seems moving in slow motion compared to Apple.

    If I had to guess, I think the dividend growth rate will be high (20%+) for several years as Apple does not like big acquisitions so there should be lots of available cash. This would have the dividend doubling every 3 to 4 years.

    I would recommend a look at Roth IRAs if you don’t have one - dividends won’t be taxed smile

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  • Posted: 21 April 2012 10:30 PM #115

    Apple will not be a dividend growth stock until it has increased its dividend by 10% or more for 5 or more years.

         
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    Posted: 21 April 2012 11:06 PM #116

    roni - 22 April 2012 01:30 AM

    Apple will not be a dividend growth stock until it has increased its dividend by 10% or more for 5 or more years.

    I agree. 

    However I know it is only speculation, but I think aapl will increase dividend on a quarterly basis.

    And I am willing to bet that the more the stock gets manipulated the higher the likelihood of a dividend increase.

    Much too early I agree to understand what will happen, however they did issue one after much analysis.  The folks who advised them on this , I am sure have plenty of experience on WS.

    Apple issued a dividend for one reason and one reason only.  To please WS and protect their shareholders.  If you want to maximize return you simply increase the dividend and split the stock every few years.

    The potential here is huge and I believe WS knew about it soon after January which explains the 50% appreciation,

    I think it will double every 3 years which puts in the $84 range in about 9 years. With splits it will happen much faster.

    I would buy this stock for dividend only since as it appreciates, I can make more tax free money and reinvested in aapl at a much faster rate.

    Buy and Hold.

         
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    Posted: 21 April 2012 11:43 PM #117

    omacvi - 22 April 2012 02:06 AM
    roni - 22 April 2012 01:30 AM

    Apple will not be a dividend growth stock until it has increased its dividend by 10% or more for 5 or more years.

    I agree. 

    However I know it is only speculation, but I think aapl will increase dividend on a quarterly basis.

    And I am willing to bet that the more the stock gets manipulated the higher the likelihood of a dividend increase.

    Much too early I agree to understand what will happen, however they did issue one after much analysis.  The folks who advised them on this , I am sure have plenty of experience on WS.

    Apple issued a dividend for one reason and one reason only.  To please WS and protect their shareholders.  If you want to maximize return you simply increase the dividend and split the stock every few years.

    The potential here is huge and I believe WS knew about it soon after January which explains the 50% appreciation,

    I think it will double every 3 years which puts in the $84 range in about 9 years. With splits it will happen much faster.

    I would buy this stock for dividend only since as it appreciates, I can make more tax free money and reinvested in aapl at a much faster rate.

    Buy and Hold.

    To qualify as a dividend challenger, contender or champion, Apple will have to wait a few more years and yearly raise its dividend. I am willing to call it a dividend growth stock when it raises its dividend the first time smile  If it raises it again the next next year, it gets to remain a DGS.

    Although multiple dividend increases in the same year are not common, I note that both GE (3 times) and Intel (2 times) have done it recently. if Apple did this, we would need to add a second spring to that graphic about Apple’s growth prospects smile

    I like how dividends reward shareholders while buy backs profit sellers. And if you are investing in a tax-advantaged account and can re-invest the dividends, you accumulate additional shares while you wait.
    I have seen a lot of misuse of cash by companies (failed acquisitions and overpriced buy backs) and would rather have the cash sent to me to use as I see fit. Apple gets the benefit of the doubt in my book until they show otherwise.

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    Posted: 22 April 2012 03:16 AM #118

    omacvi - 22 April 2012 02:06 AM

    .... Apple issued a dividend for one reason and one reason only.  To please WS and protect their shareholders….

    Why would Apple care about pleasing Wall Street or protecting shareholders? I’ll believe that when I see them raise the dividend yield consistently, not just the dividend. Anybody have any ideas why that could be in the cards? I’m not holding my breath, but it’s not impossible. Obviously just starting a dividend signals a change, and it could be the beginning of a new era of concern for shareholder interests. I hope so.

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    Posted: 22 April 2012 09:40 PM #119

    Good article from Seeking Alpha about predicting dividend growth rates
    http://seekingalpha.com/article/516181-dividend-growth-rates-using-the-past-to-estimate-the-future

    My take away from the article is that companies that have high dividend growth rates tend to have the same or slightly less DGRs in the future (but still high growth rates) while companies with low DGRs tend to have the same or slightly higher rates.

    So, for AAPL to really attract the dividend crowd and the home gamers, what we need is a commitment to raise dividends and a pattern of high dividend increases. Right now, we have a good start.

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    Posted: 25 April 2012 05:07 PM #120

    And the pressure begins to increase dividend.smile

    http://www.cnbc.com/id/47173304


    I think Apple will increase the dividend in Jan. 2013.