Apple Hikes Its Dividend and Stock Buybacks, Making It More Attractive to Value Buyers

Apple Inc (AAPL) reported a 4.3% dividend hike for the 11th year in a row on May 4 along with solid earnings and operating cash flow numbers. The company also raised its share buyback program from $76 billion to $90 billion. These actions make AAPL stock attractive to value buyers. Moreover, investors can pick up extra income by shorting out-of-the-money put options.

We predicted last month in our April 2 article that Apple would likely hike its dividend given its massive operating cash flow. For example, in Q1 it produced $28.6 billion in operating cash flow and spent just $3.7 billion on dividend payments. This is comparable to the $3.8 billion it spent last quarter on dividends.