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Why Apple’s Stock Buybacks—and Its Dividend—Could Get a Big Boost

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Apple stock has faced headwinds in 2022 but is still up 26% from this time a year ago.

Dreamstime


Apple
’s
quarterly earnings reports frequently hog the spotlight on days when they drop. The world’s largest publicly listed company has the ability to drag the rest of the stock market—and indexes like the

S&P 500
—around with it.

When the tech giant reports results later this month, investors will be eyeing revenue and profit, as usual. But they also will be focused on the capital allocation plans of tech giant Apple (ticker: AAPL).

Faced with a balance sheet flush with cash, the company is likely to boost share buybacks as well as raise its dividend, Citi analyst Jim Suva said in a report on Tuesday. A higher dividend and accelerated repurchases should, in theory, make the company a more attractive investment and help lift its stock price.

Citi expects Apple to announce an incremental stock repurchase program of $80 billion to $90 billion when the iPhone maker reports earnings on April 28. The company may also raise its dividend by 5% to 10%, Suva said.

A new buyback program would come on the heels of $81 billion deployed in repurchases across the last 12 months. Apple reported more than $37 billion in cash or cash equivalents as of the end of 2021.

Apple stock rose 2.2% on Tuesday, in line with the tech-heavy

Nasdaq
index. The stock is down 4.6% so far this year as Apple, like the rest of the tech sector, faces headwinds from an environment of tightening monetary policy. But Apple has managed to outperform its peers this year; the Nasdaq is down 14% by comparison. Apple shares are still up 26% from this time last year.

Write to Jack Denton at jack.denton@dowjones.com

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