Wednesday, October 15, 2014

Returns from Apple since it went public.

Returns from Apple since it went public

Question:   Apple went public on December 12, 1980 at an initial price of $22.00.   What is the current value of 100 shares of Apple stock?   What is the value of the dividends received by a person who purchased 100 shares at the inception of the public company?

Data:   The data for this question was obtained from yahoo finance.

Dividend and stock split history for Apple Corporation:


The stock price used in this calculation was  $97.31 observed at 1:54 November 15, 2014.

Analysis:   Information on stock splits for Apple Corporation are presented below.



Stock Split Information
for Apple Corporation
Date
Stock Split Ratio
9-Jun-14
7 to 1
28-Feb-05
2 to1
21-Jun-00
2 to 1
16-Jun-87
2 to 1



One hundred shares of Apple purchased at the time the company went public are now equal to 5600 shares (23 x 7 x 100)

The 100 shares are now worth $544,900


The comparable number for Microsoft is $1,268,640.



This is ironic given Apple’s current dominance. 

The answer may be very different in a few years.


Dividends:  

For a long part of the 1980s and 1990s Microsoft was dominant and Apple was struggling.   Apple regularly paid a small  (very small) dividend between May of 1987 and November of 1995.   During this time period the IPO investor who held the stock owned 200 shares of Apple stock.

Apple resumed dividend payments in 2012.   The stock had split 2 to 1 in 2000 and 2 to 1 in 2005; hence a shareholder who purchased 100 shares when the company went public had 800 shares

On June 9, 2014 Apple had a 7 to 1 stock split.   The investor now has 5600 share of Apple. 


Apples dividend history for a person who purchased 100 shares the day the company went public is below.



Date
Dividends per share
Shares After Accounting for Split
Dividends Received
8/7/14
0.47
5600
2632
5/8/14
0.47
800
376
2/6/14
0.43571
800
348.568
11/6/13
0.43571
800
348.568
8/8/13
0.43571
800
348.568
5/9/13
0.43571
800
348.568
2/7/13
0.37857
800
302.856
11/7/12
0.37857
800
302.856
8/9/12
0.37857
800
302.856
11/21/95
0.00429
200
0.858
8/16/95
0.00429
200
0.858
5/26/95
0.00429
200
0.858
2/13/95
0.00429
200
0.858
11/18/94
0.00429
200
0.858
8/15/94
0.00429
200
0.858
5/27/94
0.00429
200
0.858
2/7/94
0.00429
200
0.858
11/19/93
0.00429
200
0.858
8/16/93
0.00429
200
0.858
5/28/93
0.00429
200
0.858
2/12/93
0.00429
200
0.858
11/30/92
0.00429
200
0.858
8/17/92
0.00429
200
0.858
6/1/92
0.00429
200
0.858
2/14/92
0.00429
200
0.858
11/18/91
0.00429
200
0.858
8/19/91
0.00429
200
0.858
5/20/91
0.00429
200
0.858
2/15/91
0.00429
200
0.858
11/16/90
0.00429
200
0.858
8/20/90
0.00393
200
0.786
5/21/90
0.00393
200
0.786
2/16/90
0.00393
200
0.786
11/17/89
0.00393
200
0.786
8/21/89
0.00357
200
0.714
5/22/89
0.00357
200
0.714
2/17/89
0.00357
200
0.714
11/21/88
0.00357
200
0.714
8/15/88
0.00286
200
0.572
5/16/88
0.00286
200
0.572
2/12/88
0.00286
200
0.572
11/17/87
0.00286
200
0.572
8/10/87
0.00214
200
0.428
5/11/87
0.00214
100
0.214
5337.788


The 100 shares of Apple Stock paid out $5,338 in dividends since the day the stock was issued.

More than half of the dividends were issued in 2014.


Concluding thoughts:  Apple and Microsoft took two different paths.   Apple stumbled early and people who bought stock in Apple on the day the company went public did not do nearly as well as people who bought Microsoft.  

But Apple is on a roll and the story is not yet over.

Stay tuned! 








1 comment:

  1. Investing in apple stock market is a smart move. Let’s just wait and watch how this year Apple Inc will perform in today’s competitive market.

    ReplyDelete