As many companies are suspending their dividends, Apple (NASDAQ:AAPL) is actually increasing its payout. The company announced this news after market close on Thursday. The dividend boost comes alongside the company's fiscal second-quarter results, which featured a paltry 1% year-over-year increase in revenue as Apple coped with the impact of COVID-19 during the quarter. 

The dividend increase during these uncertain times highlights the company's financial strength and ability to weather unexpected challenges.

A chalkboard sketch of a bar chart with an arrow highlighting a growth trend

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Accelerated dividend growth

Apple said it's increasing its dividend by 6%, giving the company a quarterly payout of $0.82, or $3.28 annually. This translates to a dividend yield of about 1.1%.

Since initiating a dividend in 2012, Apple has increased its dividend every year. Given this track record and the company's healthy financials, investors largely expected a dividend increase from the tech company when it announced its fiscal second-quarter results on Thursday. Still, it's reassuring to see the company follow through with its eighth consecutive dividend increase when many others are suspending their dividends entirely.

Of course, Apple's business isn't likely to be as negatively impacted by the coronavirus as some other industries, namely travel and retail. Nevertheless, it was clear going into the report that the company wasn't getting away unscathed. Apple pulled its fiscal second-quarter revenue guidance in February when COVID-19 led to store closures, iPhone production constraints, and weaker demand for its products in China. Yet the company still decided to boost its quarterly cash payout. Even more, Apple's dividend increase actually marks an acceleration from last year's 5% increase.

The tech company can easily handle this increase. Over the last 12 months, Apple paid out less than a quarter of its earnings in dividends. Further, even amid this pandemic, the tech company's fiscal second-quarter operating cash flow increased by $2.2 billion compared to the year-ago period, coming in at $13.3 billion.

Returning cash to shareholders in more ways than one

Of course, dividends aren't the only way Apple returns cash to shareholders. The iPhone-maker also uses a portion of its excess cash to repurchase shares. To this end, the company announced that it has authorized an additional $50 billion to be used for share repurchases.

Even though Apple boosted both its dividend and its share repurchase program, CFO Luca Maestri was adamant that the company is continuing to invest aggressively in its future. "We are confident in our future and continue to make significant investments in all areas of our business to enrich our customers' lives and support our long-term plans," the CFO said in Apple's fiscal second-quarter update.