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How Much Will Apple Increase Its Quarterly Dividend?

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Mar. 15 2016, Updated 9:06 a.m. ET

Company to revisit capital return program in April 2016

According investment company Piper Jaffray, Apple (AAPL) is set to revisit its capital return program in April this year. The company believes that Apple will use this opportunity to increase its quarterly dividend payout and share buyback allotment.

Piper Jaffray analyst Gene Munster stated that in the last two years, Apple has increased its dividend by 8% and 11%. Munster expects Apple to increase its dividend anywhere from 5% to 10%.

In April 2014, Apple increased its dividend 8% YoY (year-over-year) to $0.47 per share. In April 2015, Apple increased its dividend 11% YoY to $0.52 per share, or $2.08 for the year, representing a yield of 2.2%.

In comparison, peer companies Microsoft (MSFT), Hewlett-Packard (HPQ), and IBM (IBM) have dividend yields of 2.8%, 4.4%, and 4.1%, respectively.

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Share repurchase program

According to Munster, Apple will add between $30 billion and $50 billion to its share repurchase program based on historical evidence in the last two years. In April 2014, Apple added $30 billion to its repurchase program, whereas in April 2015, the company added $50 billion, bringing its total to $140 billion.

As of January 2016, Apple had $30 billion left on its current share repurchase authorization after it spent $6 billion on share repurchases in the quarter ending December 2015. Apple launched its capital return program in 2012 and has reconsidered it every year in April.

Apple constitutes 15.8% of the Technology Select Sector SPDR ETF (XLK).

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