Apple increases dividend by 15%, boosts capital return spending to $100B through 2015
Apple on Tuesday announced what the company characterized as a "significant increase" to its capital return program, with plans to utilize $100 billion in cash by the end of calendar 2015.
The component of most interest to investors will be Apple's new, greater quarterly dividend, which has been increased by 15 percent, to $3.05 per common share. It will be payable on May 16, 2013, to shareholders of record as of the close of business on May 13.
Apple will also repurchase $60 billion in shares, up from its previously announced plans to buy back $10 billion. It's the largest share repurchase authorization in history.
Apple expects it will execute its share repurchase by the end of calendar 2015. The company also expects to utilize about $1 billion annually to net-share-settle vesting restricted stock units.
"We are very fortunate to be in a position to more than double the size of the capital return program we announced last year," said Apple CEO Tim Cook. "We believe so strongly that repurchasing our shares represents an attractive use of our capital that we have dedicated the vast majority of the increase in our capital return program to share repurchases."
Finally, the company also announced on Tuesday that the board has approved plans to borrow more cash. Apple said it will announce more details about these plans in the "near future," but did not give a specific date.
"We will continue to return capital to shareholders through dividends, share repurchases, and cash used to net-share-settle vesting RSUs," said Peter Oppenheimer, Apple?s chief financial officer. "We continue to generate cash in excess of our needs to operate the business, invest in our future, and maintain flexibility to take advantage of strategic opportunities."
The component of most interest to investors will be Apple's new, greater quarterly dividend, which has been increased by 15 percent, to $3.05 per common share. It will be payable on May 16, 2013, to shareholders of record as of the close of business on May 13.
Apple will also repurchase $60 billion in shares, up from its previously announced plans to buy back $10 billion. It's the largest share repurchase authorization in history.
Apple expects it will execute its share repurchase by the end of calendar 2015. The company also expects to utilize about $1 billion annually to net-share-settle vesting restricted stock units.
"We are very fortunate to be in a position to more than double the size of the capital return program we announced last year," said Apple CEO Tim Cook. "We believe so strongly that repurchasing our shares represents an attractive use of our capital that we have dedicated the vast majority of the increase in our capital return program to share repurchases."
Finally, the company also announced on Tuesday that the board has approved plans to borrow more cash. Apple said it will announce more details about these plans in the "near future," but did not give a specific date.
"We will continue to return capital to shareholders through dividends, share repurchases, and cash used to net-share-settle vesting RSUs," said Peter Oppenheimer, Apple?s chief financial officer. "We continue to generate cash in excess of our needs to operate the business, invest in our future, and maintain flexibility to take advantage of strategic opportunities."
Comments
and, at the end of 2015, they'll likely still have over 100 billion in cash-on-hand.
Quote:
Originally Posted by SolipsismX
Buying back $60 billion in shares. I can't wait to see how people put a negative spin on that.
If there is ulterior motives, no tactics from Apple can put a stop to the rumor mongering.
Originally Posted by SolipsismX
Buying back $60 billion in shares. I can't wait to see how people put a negative spin on that.
Obviously their share share is decreasing because of competitors with shares that aren't stale, so Apple will have to make fresh shares and buy all their stale shares to combat competitors' new shares of Apple.
Not sure what to make of the weaker guidance
Now this is talking, this is believing. that's building yourself.
Originally Posted by majjo
Good job, cook.
Prepare to be destroyed.
Sooner or later the shareholders are going to vote Cook off the Island if they keep hoarding cash for no apparent reason. The buyback sounded good until they said it's distributed over several years.
Originally Posted by Jetz
Sooner or later the shareholders are going to vote Cook off the Island if they keep hoarding cash for no apparent reason. The buyback sounded good until they said it's distributed over several years.
So basically "it's going to happen, even if they do exactly what we tell them to do (despite us not knowing anything at all about how to run the company) because we're going to just make up magical conditions after the fact"?
Wow, shot up by almost 5% in after hours. Better than a big drop at least but things can turn around quickly.
Quote:
Originally Posted by SolipsismX
Buying back $60 billion in shares. I can't wait to see how people put a negative spin on that.
From now till 2015?
So basically, they aren't reducing the cash hoarde at all. They are just growing it slower.
From an investor perspective, AAPL and MSFT are slowly starting to converge. MSFT investors too, thought their stock would rebound. It never did. Instead, MSFT stabilized in a new trading range and became a blue chip dividend stock. Real risk that this is what will happen to AAPL if there are no blockbuster new products on the horizon or the board isn't interested in returning money to shareholders.
Good. Good. Good!!!!!
Just what the doctor ordered.
Quote:
Originally Posted by AppleInsider
Apple CEO Tim Cook. "We believe so strongly that repurchasing our shares represents an attractive use of our capital that we have dedicated the vast majority of the increase in our capital return program to share repurchases."
Perfect, Tim. Just what you needed to say.
PS: My May-3 $420 calls are going to be looking pretty good tomorrow..... :-p
PPS: Then again not :-(...... sometimes, a silly (but thankfully, small) gamble does not pan out. Fingers crossed until May 3.
Quote:
Originally Posted by Jetz
From now till 2015?
So basically, they aren't reducing the cash hoarde at all. They are just growing it slower.
From an investor perspective, AAPL and MSFT are slowly starting to converge. MSFT investors too, thought their stock would rebound. It never did. Instead, MSFT stabilized in a new trading range and became a blue chip dividend stock. Real risk that this is what will happen to AAPL if there are no blockbuster new products on the horizon or the board isn't interested in returning money to shareholders.
That's the difference. Apple is the only tech company doing that since 98.
And even if they don't do anything like that, so what? Still the best products!
Quote:
Originally Posted by Jetz
From now till 2015?
So basically, they aren't reducing the cash hoarde at all. They are just growing it slower.
From an investor perspective, AAPL and MSFT are slowly starting to converge. MSFT investors too, thought their stock would rebound. It never did. Instead, MSFT stabilized in a new trading range and became a blue chip dividend stock. Real risk that this is what will happen to AAPL if there are no blockbuster new products on the horizon or the board isn't interested in returning money to shareholders.
Yeah, but even MSFT has a P/E of 15. No one expects MSFT to aggressively grow anytime soon. Apple still has potential to grow in the short term but has dropped to 9.
Quote:
Originally Posted by Tallest Skil
So basically "it's going to happen, even if they do exactly what we tell them to do (despite us not knowing anything at all about how to run the company) because we're going to just make up magical conditions after the fact"?
Cry all you want. Investing is about money, not emotion. I like Apple products. I own several. But if I got a shareholder ballot tomorrow asking me whether Cook should be voted off, I'd vote yes in a heartbeat. As a shareholder, I don't give a fig about Apple products. I care about what he's done for my AAPL stock. Bupkis.
And I'm not one of those people who bought at $700. Were I one of those, I'd be calling for his head on a platter.
My personal regret is not dumping my position at $700 and believing that this board cares about investors to try and rally the stock back.
I heard "future products"?
By what?