Apple Shareholder Yield

For informational and educational purposes only • Not investment advice.

Apple

iPhone, services, devices

Estimated Fair Value

$142.87

Stock price: $333.69

Fair value below stock price

Shareholder Yield Valuation estimates fair value from the cash returned to shareholders through dividends and net share repurchases.

Historical Shareholder Yield

Net dividends and share repurchases as a percentage of market value by year.

Key Valuation Metrics

Target Shareholder Yield

Notes

• Most shareholder returns come from share repurchases rather than dividends.

• The total shareholder yield is low, meaning the company returns relatively little cash to shareholders compared with its market value.

What is Shareholder Yield Valuation?

Shareholder Yield measures the cash a company returns to shareholders through dividends and net share repurchases.

Shareholder Yield Valuation uses these shareholder distributions to estimate a company's intrinsic value. The model assumes that sustainable cash returned to shareholders can be capitalized using a Target Shareholder Yield.

Unlike the Dividend Discount Model, which considers dividends only, Shareholder Yield also includes net share repurchases. This makes the model useful for companies that return capital through both dividends and buybacks.

How Shareholder Yield Valuation Works

The Shareholder Yield model estimates fair value by measuring the cash returned to shareholders through dividends and share repurchases, normalizing those payouts, projecting next year's shareholder payout, applying the selected target shareholder yield, and converting the resulting equity value into a fair value per share.

Dividends + Buybacks

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Normalize Shareholder Payout

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Estimate Next Year's Payout

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Calculate Shareholder Yield

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Select Target Shareholder Yield

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Fair Equity Value

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Fair Value Per Share

Shareholder Yield Formulas

These formulas summarize how shareholder distributions are converted into an estimated Fair Value per Share.

Shareholder Payout

\text{Shareholder Payout} = \text{Dividends} + \text{Net Share Repurchases}

Shareholder Yield

\text{Shareholder Yield} = \frac{ \text{Shareholder Payout} }{ \text{Market Capitalization} }

Next Shareholder Payout

\text{Next Payout} = \text{Normalized Payout} \times (1 + g)

Fair Equity Value

\text{Fair Equity Value} = \frac{ \text{Next Payout} }{ \text{Target Shareholder Yield} }

Fair Value per Share

\text{Fair Value per Share} = \frac{ \text{Fair Equity Value} }{ \text{Shares Outstanding} }

Key Model Assumptions

• Shareholder Payout includes both dividends and net share repurchases.
• Current dividends and net share repurchases are based on trailing twelve-month (TTM) data when four consecutive quarterly periods are available; otherwise, the latest annual data is used.
• Net Share Repurchases equal share repurchases minus cash received from share issuance.
• The median of the 10 most recent valid annual shareholder payouts is used to estimate a Normalized Payout.
• Historical payout growth is used to estimate the next shareholder payout and is limited to a sustainable long-term growth rate.
• The selected Target Shareholder Yield is used to convert the expected shareholder payout into Fair Equity Value.
• A lower Target Shareholder Yield produces a higher estimated value, while a higher Target Shareholder Yield produces a lower estimated value.
• The model assumes that normalized shareholder distributions provide a reasonable basis for estimating future cash returned to shareholders.

Step 1 — Calculate the Current Shareholder Payout

Shareholder Payout = Annual Dividends + Net Share Repurchases

$15.6B + $82.2B = $97.9B

The model begins by combining Apple's annual dividends and net share repurchases to determine the total Shareholder Payout returned to investors.

Under the current assumptions, the Shareholder Payout is $97.9B.

Step 2 — Normalize the Shareholder Payout

Normalized Payout = Median of the 10 Most Recent Valid Annual Shareholder Payouts

Normalized Payout = $89.5B

Because shareholder payouts can vary from year to year, the model uses the median of the 10 most recent valid annual payouts to estimate a more sustainable Normalized Payout.

For Apple, the resulting Normalized Payout is $89.5B.

Step 3 — Estimate Next Year's Shareholder Payout

Payout Growth = Historical Shareholder Payout Growth, limited to a sustainable long-term rate

Payout Growth Used = 5.5%

Next Payout = Normalized Payout × (1 + Payout Growth)

Next Payout = $89.5B × (1 + 5.5%) = $94.4B

Historical payout growth provides the starting point for a sustainable long-term growth rate. This rate is applied to the Normalized Payout to estimate the shareholder payout expected over the next year.

Under the current assumptions, Apple's Next Shareholder Payout is estimated at $94.4B.

Step 4 — Calculate the Shareholder Yield

Shareholder Yield = Shareholder Payout / Market Capitalization

$97.9B / $4901.0B = 2.0%

Shareholder Yield measures the annual Shareholder Payout in relation toApple's Market Capitalization. Under the current financial data, the Shareholder Yield is 2.0%.

Step 5 — Select the Target Shareholder Yield

Target Shareholder Yield = Selected Valuation Scenario

Selected Target Yield = 4.5%

The selected scenario determines the Target Shareholder Yield used in the valuation. Under the current assumptions, the Target Shareholder Yield is 4.5%.

A lower Target Shareholder Yield results in a higher estimated value, while a higher Target Shareholder Yield results in a lower estimated value.

Step 6 — Calculate Fair Value per Share

Fair Equity Value = Next Payout / Target Yield

$94.4B / 4.5% = $2098.4B

Fair Value per Share = Fair Equity Value / Shares Outstanding

$2098.4B / 14.7B = $142.87

The Next Shareholder Payout is capitalized using the selected Target Shareholder Yield to estimate Apple's Fair Equity Value.

Fair Equity Value is then divided by Shares Outstanding to calculate an estimated Fair Value per Share of $142.87.