Apollo Global Management (APO): A Dividend-Driven Opportunity in a Volatile Market

Apollo Global Management (NYSE: APO) is set to distribute its quarterly dividend of $0.51 per share on May 30, 2025, to shareholders of record as of May 16. This 10% dividend increase from the prior quarter underscores the firm’s commitment to shareholder returns, even as it navigates a challenging market environment. With assets under management (AUM) soaring to $785 billion and a disciplined investment strategy, APO presents an intriguing opportunity for income-focused investors.

A Dividend Worth Celebrating
The dividend hike marks the second consecutive year of increases, reversing a decade-long trend of declining payouts. At a trailing yield of 1.5%, the dividend may seem modest compared to high-yield peers, but its sustainability is bolstered by a 19.69% payout ratio—well within a conservative range. This suggests Apollo is retaining ample capital to fuel growth and weather economic downturns.

The ex-dividend date of May 16 means investors must own shares before this date to qualify for the payment. For context, the stock closed at $137.89 on May 2, 2025, after a 0.99% dip following Q1 earnings.

Financial Performance: Strength Amid Volatility
Apollo’s Q1 2025 results revealed an EPS of $1.82, narrowly missing estimates by 5.7%. Revenue of $978 million also fell short of expectations, but the broader picture tells a compelling story. AUM surged 17% year-over-year to $785 billion, driven by record organic inflows of $43 billion, including $26 billion from its Retirement Services division, Athene. This division’s growth is critical, as it now accounts for nearly half of total inflows.

Fee-related earnings (FRE), a key profitability metric, rose 21% year-over-year to $559 million. This growth reflects strong performance across all major strategies, including private equity, credit, and hybrid solutions. Notably, Apollo’s Private Equity Fund Ten delivered a 19% net internal rate of return (IRR)—double the industry average—highlighting its portfolio’s resilience.

Strategic Focus: Disciplined Growth for the Long Term
CEO Marc Rowan emphasized Apollo’s “purchase price matters” philosophy, prioritizing quality over quantity. For instance, the firm reduced leverage in its Apollo Strategic Income Fund (ASIF) from 1.0x in 2023 to 0.5x in 2025, a move that temporarily dented near-term earnings but positioned the firm to capitalize on widening credit spreads. In April 2025 alone, Apollo deployed $25 billion at spreads 50 basis points wider than Q1 levels—a sign of opportunistic value hunting.

The company’s $64 billion in dry powder further supports its ability to invest in dislocated markets. With origination volumes hitting a record $56 billion in Q1 (up 30% YoY), Apollo is well-equipped to scale its AUM and FRE.

Risks and Considerations
Apollo’s stock has a beta of 1.65, meaning it’s 65% more volatile than the broader market. This volatility was evident in its -16.27% YTD return, as investors grappled with macroeconomic uncertainty and sector-specific headwinds like narrowing corporate spreads. Risks include:
- Interest rate fluctuations: A key driver of Athene’s performance.
- Competitive pressures: Rising competition in fixed annuities could squeeze margins.
- Liquidity needs: While the current ratio of 1.51 signals strong short-term liquidity, prolonged market stress could test resilience.

Conclusion: APO’s Case for Long-Term Investors
Apollo Global Management offers a compelling blend of dividend sustainability and growth potential. Its 19.69% payout ratio, $785 billion AUM, and disciplined origination strategy suggest the dividend is safe, even in a slowing economy. While short-term volatility may deter conservative investors, the firm’s focus on long-term value creation—evidenced by its 19% IRR in private equity and $56 billion in Q1 origination—supports a bullish outlook.

For income investors, APO’s 1.5% yield and improving dividend trajectory make it a standout in the alternative asset management sector. Pair this with its $64 billion dry powder and robust liquidity, and the case for APO as a long-term holding grows stronger. While the stock’s beta poses risks, its structural advantages in volatile markets—such as its origination-driven model and diversified AUM base—position it to thrive when spreads widen and opportunities arise.

Investors should consider entering a position ahead of the May 30 dividend, but also monitor macroeconomic trends, particularly interest rates and credit spreads. With Apollo’s track record and strategic focus, this dividend-paying asset manager could deliver steady returns for patient shareholders.