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Here's How Many Shares of Apple You'd Need for $10,000 in Yearly Dividends
Key Points
Apple's current dividend yield is low at 0.32%.
Investors don’t have to worry at all about the durability of the dividend payouts, as the company is extremely profitable.
Apple (NASDAQ: AAPL) is recognized as one of the world's most elite businesses. And as a result of its success, investors have profited immensely. The consumer discretionary stock has soared 1,070% in the past decade (as of Oct. 2).
But the company's capital allocation policy also favors investors in another minor way, one that brings in an income stream. Here's how many Apple shares you'd need to make $10,000 in yearly dividends.
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Apple currently pays a dividend that totals $1.08 per share on an annual basis. This means that investors would need to own 9,259 shares to generate $10,000 in yearly income. At the current stock price of $331.22, investors must fork over almost $3.1 million to buy enough shares.
Clearly, Apple isn't a compelling dividend stock. Its dividend yield is extremely low at 0.32%. However, the payout has grown by 89% in the past 10 years.
Investors also don't have to worry about the dividend ever being interrupted. That's because Apple is extremely profitable, as its products and services see strong demand that boosts pricing power. Its net profit margin in Q3 (ended June 27) was an impressive 27%. And it generates enormous amounts of free cash flow, reducing financial risk and ensuring that dividend payouts are well-funded.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.