7 Oct

Tech Dividend Yields Pre-Earnings: AAPL, MSFT, DIS

WRITTEN BY Maitali Ramkumar

Tech stocks Apple (AAPL), Microsoft (MSFT), and the Walt Disney Company (DIS) have been putting up mixed performances this month. October is proving to be a weak month for the equity market. But while it’s being plagued by recession fears, it’s also being supported by optimism related to US-China trade talks.

Tech stocks are now gearing up for their next earnings season. Perhaps it’s the right time to review their dividend yields.

Tech stocks, dividend yields, and upcoming earnings

Microsoft’s dividend yield has risen to 1.5% due to the stock’s decline. The stock has fallen in line with the weaker equity market. It’s down 0.7% so far in October. In the quarter that ended in September, analysts expect Microsoft’s earnings to have risen 9% YoY.

While Apple stock has risen 1.4% this month, Disney stock has been flat. Their dividend yields currently stand at 1.4% each. Analysts expect Apple’s and Disney’s earnings to have fallen 3% and 35%, respectively, in the quarter that ended in September.

Other tech stocks Amazon (AMZN), Facebook (FB), and Netflix (NFLX) have risen 0.2%, 1.3%, and 1.9%, respectively, so far this month. However, Alphabet (GOOGL) (GOOG) and Twitter (TWTR) have fallen 0.8% and 2.0%, respectively, so far.

Wall Street analysts expect Amazon’s, Google’s, and Twitter’s earnings to fall 21%, 5%, and 3% YoY, respectively, in their upcoming results. In contrast, they expect Facebook’s and Netflix’s earnings to rise 8% and 17% YoY, respectively.

Tech stock Microsoft’s dividends and share repurchases

Microsoft has consistently paid steady dividends for the past several years. In the second quarter of fiscal 2020, Microsoft will pay a dividend of $0.51 per share on December 12, 2019. The company announced the dividend on September 18. This dividend payment reflects 11% YoY growth. Besides the dividend hike, Microsoft has also authorized $40 billion for a new share buyback program. To learn more, read Microsoft Stock: Dividend Hike, Buybacks Attract Investors.

On its latest earnings call, Microsoft’s executive vice president and CFO, Amy Hood, said, “This quarter, we returned $7.7 billion to shareholders through share repurchases and dividends, an increase of 45%, bringing our total cash returned to shareholders to over $30 billion for the full fiscal year.”

Apple’s dividend and buybacks

In the fourth quarter of fiscal 2019, Apple paid a dividend of $0.77 per share on August 15. The company announced the dividend on July 30, 2019. The dividend payment shows a 6% YoY increase. Apple is also consistently buying back shares. In the nine months that ended in June, Apple repurchased around $49 billion worth of shares.

Disney’s dividend payments

Disney has consistently paid steady dividends for the past several years. In the third quarter of fiscal 2019, Disney paid a dividend of $0.88 per share on July 25. The company announced the dividend on June 26. The dividend payment reflects 5% YoY growth.

Disney didn’t repurchase any shares in the nine months that ended in June. To learn more, read When Can Disney Resume Its Share Buyback Program?

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