Estimating Berkshire’s Apple Dividend Gains

Apple’s announcement of a 4% increase in its cash dividend spells good news for Warren Buffett’s Berkshire Hathaway Inc.

Buffett, renowned for his affinity towards dividend-paying stocks, is likely pleased with Apple’s decision to raise its cash dividend to 25 cents a share. Berkshire Hathaway holds over 905 million shares of Apple, approximately 6% of the tech giant’s total outstanding shares.

As a major shareholder, Berkshire stands to benefit significantly from Apple’s increased dividend payout. Assuming Berkshire maintains its current shareholding, its quarterly dividend from Apple would surge to $226.4 million, compared to the previous $217.3 million.

Over the next year, Berkshire could expect to receive $905.6 million in Apple dividends, up from $869.4 million prior to the dividend hike, representing a notable increase of over $36 million for the year.

The stability of Berkshire’s Apple position is a matter of speculation on Wall Street, especially amidst the recent underperformance of Apple shares, which have declined 5% while the S&P 500 has risen 8% this year.

Buffett’s investment strategy includes other dividend-paying companies such as Coca-Cola Co., Kraft Heinz Co., and Chevron Corp.

In addition to the dividend increase, Apple also reported a 10% year-over-year decline in iPhone sales, expanded its stock-buyback program by $110 billion, and addressed some investor concerns regarding its business in China.