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Apple Earnings Per Share – Why is Apple Dividend So Low?

PUBLISHED Aug 8, 2022, 3:50:03 PM        SHARE

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imgRashada Parveen

Apple earnings per share (EPS) are still lucrative for the investors as these earnings have grown 18.4% over the last 12 months. The third quarter earnings-per-share were reported at $1.20, a 7% decline year over year. But the investors are still confident about the future EPS growth in the next quarter.

In this article, we will discuss why Apple's earnings have high growth prospects and what the market share of apple is. Moreover, we will talk about the Apple cash cow and about why is Apple dividend so low. So, let's dive into this exciting discussion!

Read also about Tesla (TSLA) Alphabet (GOOG) and Netflix (NFLX) stocks

Apple Inc.

Apple Inc. is a tech giant multinational corporation centered in California. With over 154 000 employees, Tim Cook, CEO of Apple, has led this technological corporation since 2011.

Steve Jobs initiated this cutting-edge venture in 1976 and soon spread worldwide, taking up 18% of the total market share. Apple provides services by developing and distributing consumer gadgets, software, and other on-line services right from Cupertino in California.

The leading products of Apple with ever-increasing sales include iPhones, Mac, iPads, and wearables like the Apple Watch, Home, and other Accessories. This giant tech company also earns a major chunk of its revenues from other valuable supportive services to their apple clients.

Apple always pursued its goals of innovations and protecting consumer privacy in all its applications and software. Succeeding in capturing the market share, Apple has always looked for opportunities to bring the best services to its customers worldwide.

With the US's largest market share of 51%, it is also leading the global smartphones market in Europe after the Samsung or the Android phone. Although the apple and android market share has declined in the last two quarterly reports due to the withdrawals from Russia, the overall expansion is in an upward trend.

Read also Visa (V) and Bank of America (BAC) stocks

Third Quarter Report, Ending June 25, 2022

Apple reported its third-quarter earnings on July 28, and it successfully beat the market by reporting an EPS of $1.20 against the expectations of the diluted shares. The EPS witnessed a decline of 7.69% year over year.

Q3 Earnings Metrics Values YoY Change (%)
Revenue 82.96 B 1.87 % Up
Operating Expenses 12.81 B 15.10 % Up
Net Income 19.44 B 10.59% Down
Diluted EPS 1.2 7.69% Down
Net Profit Margin 23.44% 12.21 % Down
EBITDA 25.88 B 4.00 % Down

Apple's revenue increased to $83 billion in the third quarter earnings. The third quarter revenue growth was attributed to the increase in the sale of iPhones and the delivery of other Apple services.

The current apple price per share is $167.45, down 8% from year to date. The Apple price has increased since the announcement of the quarterly report on July 28.

Moreover, the company has a market capitalization of $2.69 trillion with a Price-to-earning ratio of 27.67. After witnessing the lowest price of $129.04 in June, when the market was at its lowest lows, the stock price gained momentum after trading at its lows.

Stock Metrics Values
Market Cap 2.67 T
52- week Range $129.04 - $182.94
P/E Ratio 27.47
Dividend Yield 0.55%

Compared to its competitors, apple has performed well and showed solid results.

Why is Apple Dividend so Low?

Apple's dividend has always been modest, with a steady increase in the payments of dividends. Many people wonder why the dividend of apple per share is so low. The answer to this question lies in the price of apple shares. Apple stock price is increasing, and it is trading at the highest price.

The company has announced four stock splits until now to make the shares affordable to small investors. The highest price of shares means the yields on these high-valued stocks would be lower. Conversely, a higher dividend yield reflects a lower price of the shares.

NextEra Energy Stock (NEE) Dividend And Forecast and NRG Energy Stock

Sale of Apple Bonds and Apple Earnings Per Share

Last week, Apple (APPL) sold corporate bonds worth $55 billions, intending to get enough cash for shares buybacks. The corporation already has enough cash. Suppose the company announces selling the bonds to raise capital. In that case, it can help the shareholders as they can now enjoy the increase in the equity value after the bonds have been issued.

In a similar effort to raise capital, the company also announced the sale of bonds in 2021. At that time, it raised $6.5 billion to support its buybacks. Another reason might be the lowest price of the bonds.

So, the investors can expect the earnings per share to grow in the next quarter. Moreover, showing their support for a clean and green ecosystem, Apple has issued three Green Bonds since 2016.

Learn more about the recessuion-proof utility stocks like Dominion energy Stock (D), Sempra Energy Stock (SRE) and Edison International Stock (EIX)

The Bottom Line

With all the downward EPS trend in the current fiscal year, when the supply chain has been disrupted by the Russia-Ukraine war and the highest-ever inflation rate in forty years, we can expect the EPS to fall for all the listed companies.

But the silver lining is the revenue growth due to increased sales. It points towards the recovery in the stock prices and earnings in the upcoming quarters. Moreover, the current positive outlook on the stock exchange reflects the investors' positive sentiments about the companies' future growth.

Also Read: Wil Meta Stock Go Up?, Amazon Stock Price Prediction, Microsoft (MSFT) and Is BBY A Buy or Sell? Is Best Buy still the Best Buy For Investors? Furthermore, the recent bond issuance and share buybacks announced by Apple are likely to increase the investors' and shareholders' earnings in the future. The cash cow of Apple, the iPhone, has shown resilient growth and continues to fetch a greater market share.

So, Apple's Earnings per Share are more likely to grow over the upcoming quarters or years. So, investors should buy this stock to enjoy the high yields by investing in these growth stocks.

AAPL, Big Buy

Apple, Inc.
Return: -10.35%

AAPL, Big Buy

Return: -10.35%


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