According to a recent survey conducted by Bloomberg the technology giant Apple Inc. (NASDAQ:AAPL), the world’s most valuable and profitable company, is poised to increase its dividend.
Analysts polled indicated that Apple Inc. (NASDAQ:AAPL), which resumed paying a dividend in August 2012 after a hiatus of many years, will spend nearly $16 billion in 2013 and raise its quarterly payout by over half to $4.14 a share. The resulting 3.7% yield would top all but 70 members of the S&P 500. Apple Inc. (NASDAQ:AAPL) may actually begin to return some of the $137 billion in cash it has on hand to its shareholders.
And speaking of large dividend boosts many companies increased their 2012 payouts by much more than the historical market average. Note that in the period between 1960 and 2012 the members of the S&P 500 posted a 5.2% compounded annual dividend increase (and 4.1% since 2000).
One of the biggest dividend growers last year was Paychex, Inc. (NASDAQ:PAYX). The company, which supplies payroll, HR and employee benefits services to small and medium sized businesses, more than doubled its payout to $0.66 per share. Paychex, Inc. (NASDAQ:PAYX) has a long history of steadily increasing its dividend. The stock now yields a healthy 3.9%. However, unless it can improve earnings growth, projected to be about 10% per year, Paychex, Inc. (NASDAQ:PAYX) may have trouble increasing the dividend as much in the future as its payout ratio (dividend divided by earnings per share) is now approaching 85%.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.