Apple (AAPL) Could Raise Dividend Up to 15% and Buyback by $50B - RBC Capital

RBC Capital analyst Amit Daryanani is bullish on Apple (NASDAQ: AAPL) ahead of the company's capital allocation program update, which is expected with the April EPS call.

Daryanani thinks Apple could comfortably raise its dividend by 10-15% (implied yield would be 2.3%) and increase its buyback authorization by $40-50 billion ($30B left in the current plan) versus last year's buybacks were $35 billion.

"The buyback would enable AAPL to drive ~4%+ EPS growth in FY16 & beyond," Daryanani said.

"In aggregate, given the $65B+ FCF potential AAPL could implicitly commit to returning 100% of annual FCF to shareholders over time (specially given the $200B+ cash on hand)," he added.

The firm maintained an Outperform rating and price target of $130 on AAPL.

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $105.67 yesterday.

You May Also Be Interested In

• Ball Corporation (BALL) Raises Dividend, Enters 40M Share Buyback, Announces Management Changes
• Parker-Hannifin (PH) Raises Quarterly Dividend 10.1% to $1.63; 1.2% Yield
• MGIC Investment (MTG) Announces $750M Share Buyback, Declares $0.115 Dividend