Apple Inc. (NASDAQ:AAPL) will increase its dividend by a double-digit percentage rate later this month

Apple Inc. (NASDAQ:AAPL) will increase its dividend by a double-digit percentage rate later this month

Apple Inc. (NASDAQ:AAPL) will increase its dividend by a double-digit percentage rate later this month

There’s a good chance Apple will increase its dividend by a double-digit percentage rate later this month.

Since Apple initiated its dividend in fiscal 2012, the payout has seen strong growth. The quarterly dividend has increased from a split-adjusted $0.38 in fiscal 2012 to $0.73 in fiscal 2018. Further, Apple’s dividend has increased at an average rate of about 12% annually over the past four years, with a 16% increase last year.

There’s no reason Apple can’t pull off another double-digit increase when the company reports its fiscal second-quarter results on April 30, as Apple’s business can easily support further dividend growth. Not only does the company have a net cash position of $130 billion, but it has generated more than $51 billion in free cash flow annually over the last four years. Free cash flow over the trailing 12 months was an impressive $62 billion. With Apple currently only paying out $13.9 billion in dividends annually, there’s lots of room for upside.

Further, Apple has said it is taking action to become net cash neutral, or to have an equal amount of cash and debt, over time. To move closer to this target, Apple will need to increase its capital return program fairly aggressively, and a portion of this aggressive approach will likely include more robust dividend increases.

Given Apple’s strong fundamentals and management’s plan to become cash neutral, investors should look for a dividend increase similar to last year’s 16% increase.

Balancing dividends with share repurchases

Of course, there are two sides to Apple’s capital return program. The company also likes to return capital to shareholders through a more tax-efficient method: share repurchases. Historically, Apple has given more weight to share repurchases than to dividends. For instance, Apple spent $8.2 billion repurchasing shares and $3.6 billion paying dividends in its fiscal first quarter.

With Apple stock continuing to trade at a conservative valuation, investors should expect the company’s updated capital return program to keep prioritizing share repurchases. But even with more capital going toward repurchases, a dividend increase on par with last year’s 16% boost is likely.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 180.55.

The projected upper bound is: 204.17.

The projected lower bound is: 188.88.

The projected closing price is: 196.53.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 90.4000. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 71.82. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 8 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 120.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 8 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 0 period(s) ago.

Rex Takasugi – TD Profile

APPLE INC closed up 0.340 at 195.690. Volume was 46% below average (neutral) and Bollinger Bands were 17% narrower than normal.

Open High Low Close Volume___
194.790 196.370 193.140 195.690 19,114,276

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 191.00 176.83 190.65
Volatility: 20 28 39
Volume: 30,326,004 28,903,082 33,482,484

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

APPLE INC is currently 2.6% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into AAPL.O (mildly bullish). Our trend forecasting oscillators are currently bullish on AAPL.O and have had this outlook for the last 48 periods. Our momentum oscillator is currently indicating that AAPL.O is currently in an overbought condition. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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