A Closer Look At Apple’s $400 Billion Capital Return Program

by Trefis Team
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Apple (NASDAQ: AAPL) has returned over $300 billion to its shareholders over the last five years, via share repurchases and dividends. For perspective, this number is ahead of the market cap of Exxon Mobil, one of the largest oil and gas companies. The total returns stand at close to $400 billion since Apple began its share repurchase program in 2013. In 2018, the company returned about $81 billion to shareholders, up from about $47 billion in 2015. The company’s capital returns over the last two years have been higher than its free cash flows, meaning that Apple has been tapping into its cash holdings while also raising some debt to fund the program. Below, we take a closer look at Apple’s capital return program and how the company is funding it.

View our interactive dashboard analysis A Closer Look At Apple’s Massive Capital Return Program

Total Cash Returned To Shareholders has grown from about $47 billion in 2015 to $81 billion in 2019

  • Repurchases of Common Stock have increased from $35 billion in 2015 to $67 billion in 2019.
  • On the other hand, Total Dividends Paid have grown from $12 billion to $14 billion in the same period.

Total Dividends Paid have grown from about $12 billion in 2015 to about $14 billion in 2019.

  • Dividend Per Share has grown from $2 to $3 in the same period
  • Dividend Yield, which we calculate as Dividend Per Share divided by the Average Share price over the last quarter of the year, has declined from 1.7% to 1.4%

Apple’s spending on share buybacks has increased from $35 billion in 2015 to $67 billion in 2019

  • This has enabled the company to reduce its share count by about 20% between 2015 and 2019, effectively boosting EPS by about 25%.

How Is Apple funding its capital returns program?

  • The cash Apple is returning to shareholders has eclipsed its Free Cash Flows.
  • Apple’s Free Cash Flows, calculated as Operating Cash Flow less CapEx, stood at $59 billion in FY 2019, compared to about $81 billion returned to shareholders.

Apple has been taking on Debt, while tapping into its Cash and Cash Equivalents to fund its Capital Return Program

  • Apple has been taking on more debt over the last few years, with its Total Debt rising from $64 billion in 2015 to about $108 billion in 2019.
  • Apple’s Cash And Cash Equivalents have remained almost flat at $206 billion between 2015 and 2019, although it peaked at about $269 billion in 2017.

While the Trefis estimate for  Apple’s Valuation indicates a downside, our Microsoft’s Valuation is in-line with the market.


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