Paying dividends right now when the company's stock price/revenue/profit is exploding IS INSANE!
Companies pay out dividends to make their stock more attractive to investors BECAUSE their stock price/revenue/profit HAS PLATEAUED and there are no expectations of high growth.
There are plenty of historical examples of stock purchasers making huge profits without ever once receiving a dividend from the stock. Dividends are simply a mechanism for participating in the profits while retaining ownership of the stock.
What people forget is that Apple only cares about long term stock owners. Steve Jobs reminded us of this view during the "Antennagate" press conference. He was asked how he felt about those who had lost money in Apple stock value during the situation. His answer was "we don't care, we care about those who are long on Apple". The way long term stock owners participate in the profit is to see the stock's value grow over time. It's entirely speculative about whether a dividend helps, hurts, or is neutral to growing the stock value. I'll go with Apple's management on this one to decide. They've shown how to maximize shareholder value much better than anyone else.
They haven't "maximized shareholder value". If the Board had authorized any kind of stock buy back last year instead of sitting on so much cash yielding .25%, that would have been maximizing shareholder value.
Paying dividends right now when the company's stock price/revenue/profit is exploding IS INSANE!
Companies pay out dividends to make their stock more attractive to investors BECAUSE their stock price/revenue/profit HAS PLATEAUED and there are no expectations of high growth.
Paying dividends right now is A WASTE OF MONEY.
Market Cap says we need a dividend. Apple could make all the growth in the world, who is going to buy the stock? Everyone that can already owns it at max level...
Retail investors are a drop in the sea, you could have all the retail investors sell the stock at the same time and the price will barely move. And if Apple slow its growth, the hedge funds are going to start dumping it and the stock will tank to insane low level compare to fundamentals. You could have Apple trading at a P/E of only 5 if this happen. Again, finance 101, the price of a stock is base on profit participation at some point. The only thing keeping a no dividend growth stock price is... growth.
If you want to see what happens to a growth stock that doesnt pay dividends when investors realize the company wont be able to deliver the growth: go see the netflix chart. And look at amazon, they are going down like a patato bag if they miss again.
They need new money coming in from big funds that cant touch it right now.
FAT, Bloated companies with no prospect for growth.
completly unrelated, a dividend is required for a company that doesnt growth indeed, but you can have both. Look at the pharmaceutical stocks for starters...
I think the best use of this money would be to buy up several hundred acres of former factory sites in the United States, move All production here, and slap 'Made in USA' stickers on every product box.
Detroit is calling.
Detroit has never nor will it ever be a ``IT Manufacturing Mecca.''
Perhaps if the Big 3 which bought up all the rail lines over the course of several decades had taken a more pragmatic approach to both Rails and Highways they never would have needed to be hollowed out before they could regain their footing?
GM would have been wise to develop and produce commuter rail systems for decades. Instead, they go into corrupt financing and credit. Brilliant on their part.
If by "very good" you're grading on the scale of all analysts with "perfect record" being "got something right once by sheer luck after hundreds of wrong predictions" and "completely wrong" being "every other analyst out there", sure.
Good old privilege rearing its unfortunately ugly head.
Serious question to the not despicable human being members of this site....why is it that some of the most horrible callous posters on most tech sites are also Apple fans? There is literally no correlation I can think of yet on many sites it exists almost as if it's a rule.
Note, not being facetious I genuinely want to know. It's sad and I don't get it.
Since the chinese will likely be the largest buyer of Apple products over the next 5 years, this makes little sense.
At 80 cents a day, I doubt it. When we brought manufacturing to China, it didn't lower the prices of Apple's products back home. Last I checked Apple was a US company, so it should care first about Americans.
They haven't "maximized shareholder value". If the Board had authorized any kind of stock buy back last year instead of sitting on so much cash yielding .25%, that would have been maximizing shareholder value.
I didn't want to enter this discussion, but here goes...
1) the goal of business is to make a profit at the risk of a loss -- it is not to "maximize shareholder value" or anything else.
2) making a profit allows the business to, optionally, do other things -- but the business needs to survive (be profitable) to do them.
3) if the goal were to "maximize shareholder value" -- when should they make the decision to do that and how should they do it?
If the Apple board saw a bad patch coming, should they "maximize shareholder value" by doing as Michael Dell suggested a few years back -- "sell all the assets and return the money to the shareholders"?
I think paying a dividend is a bad idea. If Apple want to return cash to shareholders, a buyback program would be better.
I'd rather see Apple buy Microsoft, keep the Mac Business Unit and all the intellectual property, continue selling the software already on the market, and shut down MS Windows development, Windows Mobile, Xbox, etc. as they stop generating revenue.
Stock buybacks are historically a bad use of shareholder money. They are generally a sign that management can't put the money to productive use.
They haven't "maximized shareholder value". If the Board had authorized any kind of stock buy back last year instead of sitting on so much cash yielding .25%, that would have been maximizing shareholder value.
Absolutely wrong.
The Board wants to maximize shareholder value. There's some truth to that (although it's an oversimplification). The board can do a lot of things with that cash:
- Save it for a rainy day
- Make acquisitions
- Save it for potential future acquisitions
- Invest it in new facilities (NC data center)
- Buy things (property or components)
- Spend it on R&D
- Pay a dividend
- Buy back stock
- Etc.
The board decides which one it thinks will maximize shareholder value. it's not an exact science so it does come down to opinions. At the PRESENT time, the board has apparently decided that holding on to the cash is the best use of the money. I'd be willing to bet just about anything that they know more about Apple's goals, opportunities, and resources than you do.
Shareholders elect the board members and authorize the board members to act on their behalf. So if the board members decide to save it for a future acquisition, then the shareholders have indirectly agreed. If they disagree, they can write to the board to ask them to reconsider or they could elect a new board, but until then, the board can do what they want.
Quote:
Originally Posted by herbapou
Dividends are the reason there is a stock market... A stock price is base on the future promise of participating in the profit. When a stock rise on growth, its all base of a future participation of the profits at a later time.
If the company never pays and dividend, the stock is not worth anything at all, its just a piece of paper. Shareholders are the owners of the company, and by being so they have the right to take a cut of the profit.
Nonsense. If a company has 1 million shares of stock and you own one of them, then you have one millionth of the company. If the company is worth a billion dollars, your share of the company is worth $1,000.
The stock market was created (and largely still exists) as a way to capitalize companies and make it possible to obtain resources greater than individuals could provide while allowing individuals to share in the ownership of entitles larger than they could afford. Most people invest to make money - which means that they hope to have more money in the future than at the present. That could be by dividends, by growth in share value, or both. Suggesting that a stock is worthless unless it pays a dividend indicates a complete lack of comprehension of how the market works.
If I had 1,000 shares of AAPL, I could trade it for nearly half a million dollars in cash. That's quite a bit for a 'worthless' item.
Apple is sitting on about $100 billion of cash. They have more than enough money to tie up supplies for their supply chain, buy any companies they want, and have a Scrooge McDuck swimming pool.
Having a reasonable dividend gives back money to the stockholders. Remember, holding stock doesn't make money without a dividend. You would have to sell.
Having strong companies that consistently pay a nice dividend is essential for any portfolio.
And how about having a DRIP? You can buy a share for a child and watch the investment grow over time.
Stock buybacks are historically a bad use of shareholder money. They are generally a sign that management can't put the money to productive use.
That has been historically true. I'm not so sure that it applies in Apple's case. They're building cash by tens of billions of dollars per year. I can't think of any case where that has happened in the past and where there were no attractive acquisition targets.
There are no acquisitions that appear attractive that would use even a small percentage of the cash. I can't think of a single company that Apple could buy that would generate anywhere near the returns that Apple has and that would fit into Apple's strategy of making insanely great products. So at some point, Apple will need to decide what to do with its excess (i.e., amounts greater than they need for acquisitions and safety net) cash. That will mean one of the following:
- Dividends
- Stock buy backs
- Major change in focus to make a huge investment in a completely unrelated area.
The latter is a 'bet the farm' investment (or would be if Apple didn't have so much cash to risk) and doesn't seem particularly likely.
When we brought manufacturing to China, it didn't lower the prices of Apple's products back home.
You don't know what the price would have been if manufacturing had been not brought to China.
Quote:
Originally Posted by TBell
Last I checked Apple was a US company, so it should care first about Americans.
That is stunningly insular view regarding a company 60% of whose sales come from non-US markets, a share that is only likely to grow even more in the future given the growth opportunities abroad compared to the US.
So if AAPL's Board had bought back any amount of shares last year as opposed to investing in money market securities at .25% that would not have been a good use of capital?
Comments
Companies pay out dividends to make their stock more attractive to investors BECAUSE their stock price/revenue/profit HAS PLATEAUED and there are no expectations of high growth.
Paying dividends right now is A WASTE OF MONEY.
There are plenty of historical examples of stock purchasers making huge profits without ever once receiving a dividend from the stock. Dividends are simply a mechanism for participating in the profits while retaining ownership of the stock.
What people forget is that Apple only cares about long term stock owners. Steve Jobs reminded us of this view during the "Antennagate" press conference. He was asked how he felt about those who had lost money in Apple stock value during the situation. His answer was "we don't care, we care about those who are long on Apple". The way long term stock owners participate in the profit is to see the stock's value grow over time. It's entirely speculative about whether a dividend helps, hurts, or is neutral to growing the stock value. I'll go with Apple's management on this one to decide. They've shown how to maximize shareholder value much better than anyone else.
They haven't "maximized shareholder value". If the Board had authorized any kind of stock buy back last year instead of sitting on so much cash yielding .25%, that would have been maximizing shareholder value.
Paying dividends right now when the company's stock price/revenue/profit is exploding IS INSANE!
Companies pay out dividends to make their stock more attractive to investors BECAUSE their stock price/revenue/profit HAS PLATEAUED and there are no expectations of high growth.
Paying dividends right now is A WASTE OF MONEY.
Market Cap says we need a dividend. Apple could make all the growth in the world, who is going to buy the stock? Everyone that can already owns it at max level...
Retail investors are a drop in the sea, you could have all the retail investors sell the stock at the same time and the price will barely move. And if Apple slow its growth, the hedge funds are going to start dumping it and the stock will tank to insane low level compare to fundamentals. You could have Apple trading at a P/E of only 5 if this happen. Again, finance 101, the price of a stock is base on profit participation at some point. The only thing keeping a no dividend growth stock price is... growth.
If you want to see what happens to a growth stock that doesnt pay dividends when investors realize the company wont be able to deliver the growth: go see the netflix chart. And look at amazon, they are going down like a patato bag if they miss again.
They need new money coming in from big funds that cant touch it right now.
Microsoft, IBM, AT&T, Johnson&Johnson, etc.
FAT, Bloated companies with no prospect for growth.
You know the companies that pay out dividends?
Microsoft, IBM, AT&T, Johnson&Johnson, etc.
FAT, Bloated companies with no prospect for growth.
completly unrelated, a dividend is required for a company that doesnt growth indeed, but you can have both. Look at the pharmaceutical stocks for starters...
and BTW IBM is doing great in terms of growth...
You know the companies that pay out dividends?
Microsoft, IBM, AT&T, Johnson&Johnson, etc.
FAT, Bloated companies with no prospect for growth.
Eating fried lobster makes you fat and bloated.
Apple paying a dividend will benefit Apple shareholders
Why does anyone pay attention to Shaw Wu?
As bad as most analysts are, Wu probably has the record for being wrong about Apple more than anyone.
I don't, but AppleInsider seems to subscribe to his blog or something.
I don't, but AppleInsider seems to subscribe to his blog or something.
He is a very good tech analyst...
I think the best use of this money would be to buy up several hundred acres of former factory sites in the United States, move All production here, and slap 'Made in USA' stickers on every product box.
Detroit is calling.
Detroit has never nor will it ever be a ``IT Manufacturing Mecca.''
Perhaps if the Big 3 which bought up all the rail lines over the course of several decades had taken a more pragmatic approach to both Rails and Highways they never would have needed to be hollowed out before they could regain their footing?
GM would have been wise to develop and produce commuter rail systems for decades. Instead, they go into corrupt financing and credit. Brilliant on their part.
He is a very good tech analyst...
If by "very good" you're grading on the scale of all analysts with "perfect record" being "got something right once by sheer luck after hundreds of wrong predictions" and "completely wrong" being "every other analyst out there", sure.
Good old privilege rearing its unfortunately ugly head.
Serious question to the not despicable human being members of this site....why is it that some of the most horrible callous posters on most tech sites are also Apple fans? There is literally no correlation I can think of yet on many sites it exists almost as if it's a rule.
Note, not being facetious I genuinely want to know. It's sad and I don't get it.
They're Republicans.
Since the chinese will likely be the largest buyer of Apple products over the next 5 years, this makes little sense.
At 80 cents a day, I doubt it. When we brought manufacturing to China, it didn't lower the prices of Apple's products back home. Last I checked Apple was a US company, so it should care first about Americans.
They haven't "maximized shareholder value". If the Board had authorized any kind of stock buy back last year instead of sitting on so much cash yielding .25%, that would have been maximizing shareholder value.
I didn't want to enter this discussion, but here goes...
1) the goal of business is to make a profit at the risk of a loss -- it is not to "maximize shareholder value" or anything else.
2) making a profit allows the business to, optionally, do other things -- but the business needs to survive (be profitable) to do them.
3) if the goal were to "maximize shareholder value" -- when should they make the decision to do that and how should they do it?
If the Apple board saw a bad patch coming, should they "maximize shareholder value" by doing as Michael Dell suggested a few years back -- "sell all the assets and return the money to the shareholders"?
3% of earnings (profits).
I think paying a dividend is a bad idea. If Apple want to return cash to shareholders, a buyback program would be better.
I'd rather see Apple buy Microsoft, keep the Mac Business Unit and all the intellectual property, continue selling the software already on the market, and shut down MS Windows development, Windows Mobile, Xbox, etc. as they stop generating revenue.
Stock buybacks are historically a bad use of shareholder money. They are generally a sign that management can't put the money to productive use.
They haven't "maximized shareholder value". If the Board had authorized any kind of stock buy back last year instead of sitting on so much cash yielding .25%, that would have been maximizing shareholder value.
Absolutely wrong.
The Board wants to maximize shareholder value. There's some truth to that (although it's an oversimplification). The board can do a lot of things with that cash:
- Save it for a rainy day
- Make acquisitions
- Save it for potential future acquisitions
- Invest it in new facilities (NC data center)
- Buy things (property or components)
- Spend it on R&D
- Pay a dividend
- Buy back stock
- Etc.
The board decides which one it thinks will maximize shareholder value. it's not an exact science so it does come down to opinions. At the PRESENT time, the board has apparently decided that holding on to the cash is the best use of the money. I'd be willing to bet just about anything that they know more about Apple's goals, opportunities, and resources than you do.
Shareholders elect the board members and authorize the board members to act on their behalf. So if the board members decide to save it for a future acquisition, then the shareholders have indirectly agreed. If they disagree, they can write to the board to ask them to reconsider or they could elect a new board, but until then, the board can do what they want.
Dividends are the reason there is a stock market... A stock price is base on the future promise of participating in the profit. When a stock rise on growth, its all base of a future participation of the profits at a later time.
If the company never pays and dividend, the stock is not worth anything at all, its just a piece of paper. Shareholders are the owners of the company, and by being so they have the right to take a cut of the profit.
Nonsense. If a company has 1 million shares of stock and you own one of them, then you have one millionth of the company. If the company is worth a billion dollars, your share of the company is worth $1,000.
The stock market was created (and largely still exists) as a way to capitalize companies and make it possible to obtain resources greater than individuals could provide while allowing individuals to share in the ownership of entitles larger than they could afford. Most people invest to make money - which means that they hope to have more money in the future than at the present. That could be by dividends, by growth in share value, or both. Suggesting that a stock is worthless unless it pays a dividend indicates a complete lack of comprehension of how the market works.
If I had 1,000 shares of AAPL, I could trade it for nearly half a million dollars in cash. That's quite a bit for a 'worthless' item.
Apple is sitting on about $100 billion of cash. They have more than enough money to tie up supplies for their supply chain, buy any companies they want, and have a Scrooge McDuck swimming pool.
Having a reasonable dividend gives back money to the stockholders. Remember, holding stock doesn't make money without a dividend. You would have to sell.
Having strong companies that consistently pay a nice dividend is essential for any portfolio.
And how about having a DRIP? You can buy a share for a child and watch the investment grow over time.
Stock buybacks are historically a bad use of shareholder money. They are generally a sign that management can't put the money to productive use.
That has been historically true. I'm not so sure that it applies in Apple's case. They're building cash by tens of billions of dollars per year. I can't think of any case where that has happened in the past and where there were no attractive acquisition targets.
There are no acquisitions that appear attractive that would use even a small percentage of the cash. I can't think of a single company that Apple could buy that would generate anywhere near the returns that Apple has and that would fit into Apple's strategy of making insanely great products. So at some point, Apple will need to decide what to do with its excess (i.e., amounts greater than they need for acquisitions and safety net) cash. That will mean one of the following:
- Dividends
- Stock buy backs
- Major change in focus to make a huge investment in a completely unrelated area.
The latter is a 'bet the farm' investment (or would be if Apple didn't have so much cash to risk) and doesn't seem particularly likely.
At 80 cents a day, I doubt it.
I guess you must be right and Tim Cook, wrong: http://www.edibleapple.com/2011/10/1...pple-in-china/
/s
When we brought manufacturing to China, it didn't lower the prices of Apple's products back home.
You don't know what the price would have been if manufacturing had been not brought to China.
Last I checked Apple was a US company, so it should care first about Americans.
That is stunningly insular view regarding a company 60% of whose sales come from non-US markets, a share that is only likely to grow even more in the future given the growth opportunities abroad compared to the US.
Stock buybacks are historically a bad use of shareholder money. They are generally a sign that management can't put the money to productive use.
By that token, dividends aren't?
So if AAPL's Board had bought back any amount of shares last year as opposed to investing in money market securities at .25% that would not have been a good use of capital?