Long Term Dividend Growth

  • Posted: 20 March 2012 03:40 PM #76

    Mav, Definitely not a appl is too expensive situation. I’m in the continued growth for sometime camp. I would have needed some non distributed proceeds from the sale of shares which would of then been used to buy blue chip dividend stocks within the IRA such as pg,clx,jnj etc. Was thinking of possibly some nly also. Now much more of a simpler and elegant solution. IMH_non_advice_Opinion

         
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    Posted: 20 March 2012 04:21 PM #77

    Didn’t read the articles and comments yet, just like to shoot off that:  It is prudent to start with a small amount and then gradually increase the dividend, is more sustainable.  MSFT started with 11% increase per year and this year is 25% per year.  Moreover, the current yield of Treasuries and money fund is very low, no point paying too dividend.  At $2.65 per quarter, yield at $600 = (2.65 x 4 x 100)/ 600 = 1.77% p.a., not bad at all.  Apple could easily up the dividend by 10-15% p.a.  All in all, Apple is doing what I’ve expected ... no special dividend and no unnecessary stock buy back (buy back to compensate for the dilution of employee RSUs/EOs/ESPPs is perfectly legitimate and is supported by most (I believed) buy n holders in this forum).

    Now is very confident that AAPL would pass $1,000 within five years, may be in only three years, as expected by many in this forum.  With a little increase in ISM (say to 23), increase in interest rate (say to 3%) and a booming economy, we can expect $1,500 to $2,000 by 2020.  So, unless you love to trade or in an aggressive wealth growth phase, there is no point in trading AAPL for the next 5-8 years.

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  • Posted: 20 March 2012 04:35 PM #78

    nwjade - 20 March 2012 05:35 PM

    The dividend is a little less than I was expecting. I was hoping for 2-2.5 percent. At any rate I’m very happy they’ve declared a recurring dividend which will more than likely be increased over time.

    The reason I’m so happy about the dividend (and I may be one of many in this situation) is I’m planning on retiring at the end of 2012. Before the dividend rumors started, I was planning on having to sell part of my aapl shares to retire. I didn’t want to have to do that. I wanted to keep all my shares which are worth into seven figures so they can continue to grow. Now between the aapl dividend which is all in a IRA and interest income from my 401K and social security I don’t have to sell any aapl.

    I feel like it’s a win-win. I keep my aapl and retire anyway. If many others fall into this category I would think it’ll have a positive effect on the strength of the stock.

    By the way, pre dividend rumors I set a price of $550 I was going to sell shares at for retirement. So glad I didn’t!

    nwjade,
    Congratulations on your impending retirement. I’m coming up on year 4 of retirement and my wife just passed her first year. We’re in a similar situation where 70% of our Apple stock is in my wife’s 401K and our IRA accounts. We’re getting by very nicely on our pensions and my social security without touching our Apple stock. And we’re both pleased to be able to continue to hold our stock; plus now, with the dividend, we can buy more AAPL within our IRAs and also have a little extra in dividends from the non-IRA accounts.
    I can also identify with you almost selling shares at $550 since I was going to sell all Apple shares in my wife’s 401K at $470 so she could roll the money into an IRA.  The idea was to repurchase the stock after the money got into the IRA but we would have lost many shares in the process since the stock moved up so quickly.

         
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    Posted: 20 March 2012 04:42 PM #79

    nwjade - 20 March 2012 05:35 PM

    ... I feel like it’s a win-win. I keep my aapl and retire anyway. If many others fall into this category I would think it’ll have a positive effect on the strength of the stock.

    Decided to halve the planned sale of AAPLs in 2013 and 2014*.  For many years, was selling AAPLs to raise cash for buying real estate for its passive income (in place of dividend paying stocks and bonds/Treasuries).  Asset allocation strategy:  100% AAPLs >> AAPLs + RE.  *That is the initial decision, is reassessing whether should buy any more RE now that Apple is paying dividend.  If don’t buy RE, won’t need to sell AAPLs, positive effect LOL on AAPL.  After all, already have three rental properties rolleyes.

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  • Posted: 20 March 2012 05:19 PM #80

    Luckychoices - 20 March 2012 07:35 PM
    nwjade - 20 March 2012 05:35 PM

    The dividend is a little less than I was expecting. I was hoping for 2-2.5 percent. At any rate I’m very happy they’ve declared a recurring dividend which will more than likely be increased over time.

    The reason I’m so happy about the dividend (and I may be one of many in this situation) is I’m planning on retiring at the end of 2012. Before the dividend rumors started, I was planning on having to sell part of my aapl shares to retire. I didn’t want to have to do that. I wanted to keep all my shares which are worth into seven figures so they can continue to grow. Now between the aapl dividend which is all in a IRA and interest income from my 401K and social security I don’t have to sell any aapl.

    I feel like it’s a win-win. I keep my aapl and retire anyway. If many others fall into this category I would think it’ll have a positive effect on the strength of the stock.

    By the way, pre dividend rumors I set a price of $550 I was going to sell shares at for retirement. So glad I didn’t!

    nwjade,
    Congratulations on your impending retirement. I’m coming up on year 4 of retirement and my wife just passed her first year. We’re in a similar situation where 70% of our Apple stock is in my wife’s 401K and our IRA accounts. We’re getting by very nicely on our pensions and my social security without touching our Apple stock. And we’re both pleased to be able to continue to hold our stock; plus now, with the dividend, we can buy more AAPL within our IRAs and also have a little extra in dividends from the non-IRA accounts.
    I can also identify with you almost selling shares at $550 since I was going to sell all Apple shares in my wife’s 401K at $470 so she could roll the money into an IRA.  The idea was to repurchase the stock after the money got into the IRA but we would have lost many shares in the process since the stock moved up so quickly.

    Thanks, I have mixed feelings about retiring, I have a good job with a fortune 500 company for 33 years working from home for the last 10 that is kind of hard to give up.
    I’m 63 and in good health and feel much younger too but it’s time to cut the cord I think.
    Apple is 82% of my portfolio (no margin) but I still feel comfortable with the ratio that high anyway. Now that I won’t have to try and trade it so much the better. Just let it continue to grow. I do have a much smaller amount of apple shares in a Roth I’ve been thinking of selling and converting to leap calls to try and have them catch up to my regular IRA but haven’t done anything yet. Being able to take money out once in a while tax free from the Roth would be icing on the cake.

         
  • Posted: 20 March 2012 05:31 PM #81

    Mace - 20 March 2012 07:42 PM
    nwjade - 20 March 2012 05:35 PM

    ... I feel like it’s a win-win. I keep my aapl and retire anyway. If many others fall into this category I would think it’ll have a positive effect on the strength of the stock.

    Decided to halve the planned sale of AAPLs in 2013 and 2014*.  For many years, was selling AAPLs to raise cash for buying real estate for its passive income (in place of dividend paying stocks and bonds/Treasuries).  Asset allocation strategy:  100% AAPLs >> AAPLs + RE.  *That is the initial decision, is reassessing whether should buy any more RE now that Apple is paying dividend.  If don’t buy RE, won’t need to sell AAPLs, positive effect LOL on AAPL.  After all, already have three rental properties rolleyes.

    I’ve enjoyed reading your posts over the years and I’m of the same thinking you’ve had about no margin, no trading, let it grow (although I did try to swing trade a couple times and would have been better off in the long run if I hadn’t) When the dividend was announced I thought I wonder if this will change Mace’s approach of selling x amount of share per year to diversify? So interesting, thanks for sharing your latest thoughts!

         
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    Posted: 21 March 2012 02:57 AM #82

    I use TD Ameritrade and they will reinvest the dividends for you at no cost, even if it is just a fractional share. Call whomever you use as a broker, they probably will too.

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  • Posted: 21 March 2012 08:18 AM #83

    Michael Dell should be satisfied

    In 1997, when asked what he would do with Apple, Michael Dell famously exclaimed: ?What would I do? I’d shut it down and give the money back to the shareholders.? Just fifteen years later, I am pleased to report that Apple is finally giving the money back to the shareholders.

    Apple’s market cap on the day of Dell’s request was $2.733 billion. This morning, Apple announced a quarterly dividend of $2.65 per share. Given 932 million shares, the total quarterly payment by Apple to investors will be $2.47 billion. About four months after the dividend takes effect, Apple will have given all of the money back to the shareholders.

    Michael Dell should be satisfied.

    Michael Dell should be happy smile

         
  • Posted: 21 March 2012 09:42 AM #84

    Apple makes about 40 Billion a Year. The share and buy back plan will not prevent Apple’s cash hoard to continue growing at least 20 Billion a year. Could reach 200 billion in 2017…

         
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    Posted: 21 March 2012 10:59 AM #85

    I have a DRIP that applies to all my holdings. The stocks that have reinvestment plans post fractional shares, whereas those that do not leave a little cash behind. YMMV

    The AAPL dividend means I will never have to worry about affording Snickers bars again. Plus, my pesky iTunes habit is now covered quite generously, thank you.

         
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    Posted: 21 March 2012 09:04 PM #86

    Hamourabi - 21 March 2012 12:42 PM

    Apple makes about 40 Billion a Year. The share and buy back plan will not prevent Apple’s cash hoard to continue growing at least 20 Billion a year. Could reach 200 billion in 2017…

    It could reach 200 billion…next year!

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    - Pro: Apple HDTV, iPhone Air, Stock split, Consumer robotics

         
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    Posted: 19 April 2012 04:34 PM #87

    I wanted to start a discussion on dividend growth.

    Right now we are at $10.60 a year or 1.8% of stock price at $590.

    If we remain at 1.8% as the stock price increases over the next 4 years, it would seem our dividend will growth to be quite high.  Am I missing something?

    If we forecast aapl to be at $3000 a share in 3 years our dividend would be $54 a year.

         
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    Posted: 19 April 2012 06:30 PM #88

    omacvi - 19 April 2012 07:34 PM

    Right now we are at $10.60 a year or 1.8% of stock price at $590.

    If we remain at 1.8% as the stock price increases over the next 4 years, it would seem our dividend will growth to be quite high.  Am I missing something?

    If we forecast aapl to be at $3000 a share in 3 years our dividend would be $54 a year.

    Your share price is too high.  My guess is 10-15% dividend growth per year for the next five year.  In 2017, dividend would be $21.32 per year.  Share price = $1184 for 1.8% yield.  An investor holding 1,000 shares would be collecting dividend equivalent to a fresh graduate’s starting pay.

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  • Posted: 19 April 2012 06:38 PM #89

    I can live well with dividend of $54 a year but not $21.32 a year.

         
  • Posted: 19 April 2012 06:45 PM #90

    alice - 19 April 2012 09:38 PM

    I can live well with dividend of $54 a year but not $21.32 a year.

    I don’t mean to be a snob but after taxes - how can you live on that in a full year???

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