Time in the Market dividend review – April 2018 – Apple dividend increase

It’s the end of April and we finally have some nice weather. The start of May also brought some good news in the form of an Apple dividend increase! During their earnings call on May 1st, Apple announced a $100B stock buyback program plus a 16% dividend increase payable in May.

That’s good news for any Apple stock holders such as myself. However, it’s also good news for anyone that owns an S&P 500 index. Apple makes up nearly 4% of that index so that bump will likely trickle down to everyone even if you don’t hold the stock directly. The 16% increase is the biggest one in Apple’s history and speaks to their commitment to return money to shareholders. Apple remains one of the biggest cash cows in the world and I don’t see that changing anytime soon.

The good thing is that their payout ratio is still barely above 25%. That means investors can expect them to increase their dividend at a similar pace going forward. Their yield is still below the market at 1.65% but there’s plenty of room to grow that. Combining that with Apple’s great results means the stock has been a solid investment in recent years. I don’t hold a ton of Apple stock but I’m glad to see any stock I own get a bump. It’s also a good thing that the stock is heavily represented in many of the index funds I own. That’s sure to help future results down the line.

United HealthGroup(UNH) is the next stock I own that I expect will raise their dividend. They typically do so in June so I’m waiting to see if I get another 20%+ bump like we have the past few years. Much like Apple, UNH has a low payout ratio and plenty of room to grow their dividend.

It’s always good to look forward but now it’s time to look back at April’s results. March, one of the four big months in the year for me is behind us. It was a great one on the dividend side with a 29.7% increase y/y.

Related: March Dividend Review

I’m now back to the slow bond income months before June comes back with the big numbers. I don’t own any stocks that pay in April and only own a few Apple shares. That will boost my May results especially after the Apple dividend increase but both months are a far cry from the quarter ending months.

The good thing about these low months is that they’ve been growing as well. Bond interest rates are rising which depresses prices but improves yields. The 2017 stock market also forced me to buy more bonds as my stock allocation grew above targets. That has led to some good increases y/y in these off months. January was up 44% and February grew 53%. Those are some solid growth rates even if they’re off a much lower starting point.

Last year’s April total was $67.36 so let’s see if I can keep that rate of growth going.

April Dividends

Apple dividend increase

April’s dividend total comes in at $107.56!

That’s a 59.6% bump over 2017 which continues the streak of double digit percentage increases. It’s nice to see these small months grow so much. It seems like I’m at a spot where my dividends are generally going to be $100+ going forward and that’s cool.

One of the things that’s obvious is the drop from 2016 and 2017. I believe I owned a stock that paid in April in 2016 that I have since sold off but I don’t recall what it was. 2017 was all bond income as is 2018. That shows the power of continued contributions combined with rising bond yields.

Long term returns are driven by compounding and even these small months matter. $107.56 reinvested at my average yield will give me an extra $2.37 in annual income going forward. HUGE!

Steve, my dividend employee worked hard last month and is taking it easy until June. Steve’s hourly wage this month was $0.65/hr. That takes his annual wage down to $2.89/hr. Not quite enough to retire yet Steve!

Related : My dividend employee Steve

Overall, this year is looking good so far and I’m on pace to hit my 2018 goals. YTD growth at this point in the year is 32.5% which is nice considering my goals only went up about 16%. I’ll likely see that drop as the bigger months’ growth rates will be lower.

You can see by the graph below that the biggest months are yet to come as well. The biggest one, December has historically shown much smaller growth rates.

yearly dividends

May is going to be lean as it’s barely visible on the graph. However the extra 16% from the Apple dividend increase won’t hurt and I hope I can keep a decent growth rate going into and past June.

Thanks for reading and let me know how your April went. Good growth on your end as well?

April Total : $107.56
2018 Total : $1927.07
Portfolio monthly hourly wage : $0.65/hr
Portfolio annual hourly wage : $2.89/hr

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16 thoughts on “Time in the Market dividend review – April 2018 – Apple dividend increase

  1. Apple just never ceases to amaze me – I wonder how long they’ll be able to keep churning out the cash for. Buffett seems to be a big fan lately as well.

    Getting a few little dividends in the smaller months is great to keep the momentum going. April is one of our biggest months here in Australia, as well as September / October – most stocks only pay dividends twice a year around these times, so the remaining months are very lean indeed!

    1. Yea Apple is a solid company especially now that their services revenue is growing and the stock market is keen to give them a bigger valuation.

      That’s interesting that Australia has such a different pay schedule since I’m all used to the quarterly payouts.

  2. I don’t own Apple. Another missed opportunity among many for me lol. With a payout ratio of only 25% as you stated there are many more increases to follow. They also make stuff people want and make money quarter after quarter. Congratulations on your increasing dividend stream. Really well done:)

  3. Hi Time, I was very pleased with the Apple dividend increase also. I only hold a moderate size position but was fortunate to get in during the early years after they became a dividend payer back in 2012. Tom

    1. Indeed – I’ve held this small position for quite some time – I find that companies that have the cash flow to pay a dividend but aren’t paying one now are solid investments in the long run. Eventually you run out of opportunities to grow and you want to share some of that money with investors in other ways.

  4. I hold some Apple so this is great news for me. Additionally I have some invested into an S&P index fund so that’s a bonus as well. I wonder what this means for Apple’s growth prospects in the future. I guess we’ll have to wait and see.

    1. It’s hard to grow a ton as such a large company. Still, even with the dividend bump, the free cash flow is crazy so they have plenty of cash to invest, buy back stock or buy new companies.

  5. Steve has to be pretty darn happy with that annual growth rate in wages. Congratulations on the great growth rate and keep up the great work That was definitely great news from Apple as well and I’m a little jealous that I don’t own any shares.

    Cheers,

    Bert

    1. Steve’s not complaining about the raise that’s for sure. It’s nice to see these smaller months start to grow at a solid rate!

  6. Congrats! AAPL increase was awesome and most welcome. They have lots of cash … expect more dividend hikes going forward 🙂 Do you hold bond funds? what is the yield? Capital One 360 has online 1-Year CDs at 2.10%.

    1. I think my yield on the bond funds ranges from 3-5.5% depending on the fund.

      I do have some cash and it’s nice to finally get a decent yield on that as well! My capital one 360 MM fund is somewhere in the 1.6% range now.

  7. Love the AAPL raise, but sad I’m not a shareholder. AAPL has many years of solid dividend increases to come, I’m sure.
    Nice to see you are on pace to reach/exceed your goals, too. Outstanding work, TITM.

    1. ED, at least you’ll benefit if you hold any index funds at all as Apple is represented in some way in most of them.

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