You guys already know this, but:

Low dividend companies, usually they have large revenue streams and profits but they still have an opportunity for growth, this why the don't give much dividend to shareholders. At the same time they usually grow fast. Nvidia is an example of this,

On the other hand, there are well established companies like large pharmaceutical companies that pay out large dividends like 3-6% because they are cash rich, have established their empire, and can use that extra money to pay shareholders. I feel like Apple falls into this category, so I'm just curious why they dividend is only 0.53% as it looks like the've stopped innovating their products and they sell the products year by year.

In addition, pharmaceutical companies with high dividends spend hundreds of millions of dollars on new drugs, so would've their dividend be low as the need their money to reinvest in new drugs?

The answer may be obvious but I'm just curious.

Apple’s board of directors has declared a cash dividend of $0.24 per share of the Company’s common stock, an increase of 4 percent. The dividend is payable on May 18, 2023 to shareholders of record as of the close of business on May 15, 2023. The board of directors has also authorized an additional program to repurchase up to $90 billion of the Company’s common stock.

https://www.apple.com/newsroom/2023/05/apple-reports-second-quarter-results/

I see a lot of dividend investors recommend Apple and Microsoft for the sake of future dividend growth.

Currently Apple pays a 0.70% dividend yield at the share price of $127.

And Microsoft pays a 0.91% dividend yield at the share price of $247.

For Apple that's a ~27% dividend payout ratio based on the trailing 12 months.

And for Microsoft that's a ~39% dividend payout ratio based on the trailing 12 months.

Apple has been increasing their dividends consecutively for 8 years now.

and Microsoft has been increasing their dividend consecutively for 11 years now.

Correct me if i'm wrong but, if i'm not misunderstanding this then if you buy shares now at the current share price and with the current yield, and they both continue to increase their dividends then doesn't that mean that your ''personal'' dividend yield will be a lot higher then 0.70% or 0.91%?

I mean that the price you paid for it per share ($127 and $247) will likely be a lot lower then the price other investors will have to pay for it in the future but you still get the same dividend per share.

I think this is called ''Yield On Cost'' but i'm not sure.

And if this is true then doesn't it mean that long-term (like 20+ years in the future) it's probably better to buy stocks that have a low yield now but are continuously increasing their dividends and have a lot of room for that dividend to grow?

If the question above is true then, the point i'm trying to get to is why Apple and Microsoft in particular?

EDIT: thanks everyone for the answers, i read through all of them. I'm gonna go do some calculations and see where these 2 fit in my portfolio. I appreciate this sub.