Will Apple's Capital Return Program Keep Expanding?

In a note that's turning heads on Wall Street, Bank of America released a bevy of information on Apple Inc. AAPL Tuesday morning. In addition to hedge fund ownership and iPhone growth, the firm also commented on the company's capital return strategy.
Apple now pays a dividend yield of 2.11 percent -- the company last raised its dividend in the April quarter by five cents per share (split-adjusted). Apple has also continued to buy back its own shares, purchasing $14 billion in open market purchases in its fiscal fourth quarter after $10 billion total in Q3, $7 billion total in Q2 and $5 billion total in Q1.
While shares haven't responded well to this activity -- they lost 4.6 percent in 2015 -- there's still upside for investors, according to Bank of America analysts. "We expect the Board to approve another repurchase authorization at about the same timeframe in 2016 (April 2016) in a similar amount (~$40bn).

"We also expect annual dividend increases to continue," they wrote.

Related Link: Apple Is Under-Owned In Hedge Fund Land

Spending A Lot On Buybacks

As a recent FactSet data pull shows (highlighted by Market Realist), the company's buyback expenses totalled 29.6 percent of net income in its fiscal third quarter. That number was above Microsoft Corporation MSFT, but below Oracle by 4 percentage points.
Also of note, S&P 500 companies' buyback-to-net income ratio is its highest since 2009, at 64.6 percent. Further earnings declines could "push the ratio even higher over the next three months," FactSet said.