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apple dividend yield
That, coupled with AAPL's historically high share price, has always kept me from buying Apple stock - but, as a trader, it hasn't kept me from generating income with Apple options.
Last week, the cash-rich company finally took a step toward rewarding loyal shareholders by declaring a dividend - a quarterly payout of $2.65 a share, beginning with the fiscal fourth quarter, which runs from July 1 to Sept. 30, 2012.
Assuming the payouts continue, which they almost certainly will, that means Apple's annual dividend in fiscal 2013 will be $10.60 a share, which sounds fairly rich - except for one thing...
At its closing price of $599.34 last Thursday, Apple remains one of the market's highest-priced stocks, meaning the new annual dividend of $10.60 will equate to a yield of only 1.76%.
That's decent, but it's hardly near the top of the income-stock ranks. Plus, it'll be well over a year before you can collect the full dividend.
Fortunately, by using options, you can easily generate some significant income while waiting for Apple's new dividend to kick in - and multiply your yield at the same time.
Let me explain...
Apple announced Monday that starting in September, it will pay a $2.65 quarterly dividend.
Apple also announced a $10 billion stock buyback program to be conducted over three years, beginning in September.
The stock buyback was a bigger surprise to analysts. While too small to move the stock significantly, Apple CEO Tim Cook said the intent is to avoid earnings-per-share dilution from future shares issued to reward employees.
The Cupertino, CA company's enormous pile of cash and investments - over $97 billion as of the end of 2011 - had led to increasingly strident calls for an Apple dividend in recent years.
Yet despite today's investor-friendly moves, some think Apple could have done more.