How Much AAPL Stock Would You Need To Earn Minimum Wage From Apple’s New Dividend Program?

How Much AAPL Stock Would You Need To Earn Minimum Wage From Apple’s New Dividend Program?

Would this fry cook be better off investing in Apple stock?

When asked today why it was going to begin paying out an ongoing quarterly dividend of $2.65 per share to stockholders, one reason Apple cited for the new plan was that it wanted to “generate income” for its investors, and consequently attract investors for whom a dividend was an investment necessity.

It got us thinking. Apple says it wants to generate income for its shareholders, but $2.65 per quarter per share is a pretty small amount. How much stock would you need to own to even earn minimum wage from dividend payments?

The answer might surprise you, and will surely put into perspective the size of the investments Apple is hoping to attract.

Here’s how we did the math. First, we took the minimum wage of California, Apple’s home state, which is 8 dollars an hour. For a 40 hour work day that takes place over an average of 22 work days per month, the average Californian minimum wage employee makes $1408 a month, before taxes. Since Apple pays the $2.65 dividend quarterly, we multiplied $1408 by three months, giving us a quarterly minimum wage earnings of $4224.

So how many shares of Apple stock would you need to earn $4,224 in dividends per quarter? 1,594 shares paying a $2.65 dividend every three months.

And how much does 1,594 shares of Apple stock cost? At writing, the value of one share of AAPL costs $598.35; 1,594 shares would cost you $953,747.32 on the market.

Got that? To earn minimum wage on the new Apple dividend, you need to own almost a million dollars in Apple stock.

Heck, even if you just want to earn the average wage of a Foxconn assembly line workers, you need to invest almost $300,000 in AAPL per quarter.

Amazing. We’re not financial wizards here, but it really makes clear the type of investors Apple is trying to attract: the kind of Gordon Geckos who can drop a hundred million into a company and not bat an eye. The only people earning any real money on this move are already gazilionaires.

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  • blasterman

    Unless you bought at $3 a share in 1997 in which case you can get back 4/5ths of your initial investment every quarter. Let’s face it though, this dividend was put out to shut people up and attract income funds that buy and hold so that the stocks erratic price changes stabalize.

    The amount they are paying is nothing. 10 billion in buy backs over 3 years and 30 billion in dividends over the same period. That’s 40 billion over 3 years. apple has 100 billion in cash holdings now. Last year they increased cash holdings (last year alone) by 37 billion. In other words, this will do nothing to their 100 billion and it will do next to nothing at preventing them from increasing the cash pile. They are spending the equivalent of one year’s cash increase over 3 years. All this does is make it take 4 years for the cash holdings to hit 200 billion instead of 3 years (and that assumes no growth!).

  • ronenm

    This is fantastic. Just puts you in perspective of how much the dividends are actually worth.

  • axual

    Which is why you buy stock when its not $594 per share but $59 per share. The problem with this is that many people buy stock to make short term gains. We need to start thinking in long term timeframes like ten or twenty years.

  • djrobsd

    What a silly article.  People buy a stock to hold onto it and sell it at a later date for a profit, not to make money off the dividends.. 

  • davidk

    “Heck, even if you just want to earn the average wage of a Foxconn assembly line workers, you need to invest almost $300,000 in AAPL per quarter.”
    Um, no you wouldn’t, you’d need to buy $300k period.  Dividends are paid out against existing stock, not simply stock purchases.  IOW if I buy a share now, I’ll get a dividend every quarter, every year until they stop doing dividends or I sell my stock.

  • Mikael Fransson

    Stupid angle of this article. How many shares in ANY company does a minimum wage employee own to begin with?

  • gdavid2

    Mr. Brownlee, I suggest you not buy any AAPL stock. After all, if you put the money in the bank you would earn as much as 1/2% per year compared with the the miserable 1.8% you would get investing in AAPL at maybe $600 per share. And you are already earning minimum wage, right? … right?

  • David Alexander

    Article also misses the point that some stock funds (that have lots of money) require that the company pay a dividend inorder for the stock to be considered for the fund.  This plan allows for the fund, if the apple stock is included to particiapte in the dividend as requried but also build up the assets of the fund.

  • Alan Holwill

    Wow, in the California people on minimum wage have to work 40 hours a day?

    lol.

  • WVMikeP

    Or you buy into funds that produce dividends that you can then immediately reinvest.

  • ltcarter47

    To pay their California-inflated rent, yes.

  • Mike Rathjen

    40 hour work days!

    Man, forget about Foxconn, people should be criticizing California!

  • Jacky

     Apple might go bankrupt in 20 years buddy.

  • Christopher Breen

    holy shit a human being made a couple of mistakes while he wrote a quick article on the internet. call the thought police

  • imajoebob

    Dividends are commonly contemplated as “interest” on your investment.  So if you buy AAPL at today’s price, you can expect a return of 1.7%/yr on your principal.  More than 50% higher than you’d get on a Jumbo CD.  

    Ironically, I expect a vast majority of the shareholders will simply reinvest their dividend back into Apple, which means the entire process is somewhat self-defeating.

  • HerbalEd

    Crunch the numbers any way you want, but the fact remains …. $40B is a LOT OF MONEY.

  • HerbalEd

    Actually paid dividends is a major factor for many investors. In fact, many will not buy stocks that don’t pay dividends.

  • HerbalEd

    Yeah. We should all lower our journalistic standards so a pretend-journalist can write a quick, non-edited article. Another example of the dumbing down of America.

  • HerbalEd

    It’s not self-defeating if paying dividends is meant to increase the buying of Apple stock …. which it is.

  • divd

    My father would only buy stocks that gave a dividend. When he finally passed away, his wife is now living off the dividends, not touching the principle, which will go to his children when she passes away. All those years he just reinvested the dividends. And he was not a rich man, just a middle class one. If you know what you are doing, it is a very good thing.

  • imajoebob

    Then why are they buying back shares? That’s why it IS self-defeating. Normally, these (declaring a dividend and buy-backs) are competing strategies. A dividend makes stock more desirable and drives up the price. This makes a buy-back much more expensive and difficult.

About the author

John BrownleeJohn Brownlee is a Contributing Editor. He has also written for Wired, Playboy, Boing Boing, Popular Mechanics, VentureBeat, and Gizmodo. He lives in Boston with his wife and two parakeets. You can follow him here on Twitter.

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