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Does APPL pay out dividends?

post #1 of 19
1/12/11 at 12:29am
Thread Starter 
As per the last press release by Apple covered here

http://www.appleinsider.com/articles...upid_ones.html

Apple was sitting on 51b USD cash and that figure is likely to have increased by now.

Does Apple pay dividends?
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post #2 of 19
1/12/11 at 6:21am
They haven't in the last 10 years that i've held it.
They use their cash for R&D and expansion/acquisitions rather than incurring debt... a MUCH better way to run a company. (If only our government would take notice )
From out there on the moon, international politics look so petty. You want to grab a politician by the scruff of the neck and drag him a quarter of a million miles out and say, "Look at that!" -...
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From out there on the moon, international politics look so petty. You want to grab a politician by the scruff of the neck and drag him a quarter of a million miles out and say, "Look at that!" -...
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post #3 of 19
1/12/11 at 8:17am
Apple last paid a dividend during the 1990s, but never since.

They don't use the accumulated cash for anything, which is why it continues to accumulate at the rate of over $1b a month.
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post #4 of 19
1/12/11 at 9:54am
Quote:
Originally Posted by Dr Millmoss View Post

...They don't use the accumulated cash for anything, which is why it continues to accumulate at the rate of over $1b a month.

???
PA Semi, Lala, Quattro, Intrinsity (just to name what I can remember off the top of my head) ... all cash acquisitions.
It would seem that Apple DOES use their cash for something.
From out there on the moon, international politics look so petty. You want to grab a politician by the scruff of the neck and drag him a quarter of a million miles out and say, "Look at that!" -...
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From out there on the moon, international politics look so petty. You want to grab a politician by the scruff of the neck and drag him a quarter of a million miles out and say, "Look at that!" -...
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post #5 of 19
1/12/11 at 10:20am
Quote:
Originally Posted by KingOfSomewhereHot View Post

???
PA Semi, Lala, Quattro, Intrinsity (just to name what I can remember off the top of my head) ... all cash acquisitions.
It would seem that Apple DOES use their cash for something.

All small acquisitions that could easily be made out of free cash flow. The cash mountain would not be growing so quickly if they were using it for anything. Not only aren't they using it, making responsible use of that kind of money would be virtually impossible at this point, and even more so going forward. The hoard will probably grow to $65-70b by the end of the year and one estimate has it pegged at over $90b by the end of 2012.

Yes, I know -- this is one of my hobby horses. I've been riding it for years, and each year the amount of money Apple has stockpiled and not spent has grown.
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post #6 of 19
1/12/11 at 1:05pm
Just because they don't use all of it... or even most of it... or even (in your opinion) a significant chunk of it doesn't mean that they don't use it. They were able to build the NC data center using a small amount of that cash. (Without having to encumber the corporation to do it!) That is using it.

Spending less cash than you're bringing in will naturally cause your cash-on-hand to increase. That doesn't mean they don't spend ANY of it though.

It is a stellar way to run a business. There's no reason to spend it just because they have it... wait 'till they have a need or desire to do something with it. It makes it easy for Apple to make acquisitions or expansions when they see fit... no worries about obtaining financing and debt servicing.
From out there on the moon, international politics look so petty. You want to grab a politician by the scruff of the neck and drag him a quarter of a million miles out and say, "Look at that!" -...
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From out there on the moon, international politics look so petty. You want to grab a politician by the scruff of the neck and drag him a quarter of a million miles out and say, "Look at that!" -...
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post #7 of 19
1/12/11 at 8:58pm
Quote:
Originally Posted by Dr Millmoss View Post

All small acquisitions that could easily be made out of free cash flow. The cash mountain would not be growing so quickly if they were using it for anything. Not only aren't they using it, making responsible use of that kind of money would be virtually impossible at this point, and even more so going forward. The hoard will probably grow to $65-70b by the end of the year and one estimate has it pegged at over $90b by the end of 2012.

Yes, I know -- this is one of my hobby horses. I've been riding it for years, and each year the amount of money Apple has stockpiled and not spent has grown.

At some point it seems like they will have to do a distribution. On the other hand, they hired an M&A specialist so maybe we will be looking at a more acquisitive Apple.
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post #8 of 19
1/12/11 at 9:42pm
Quote:
Originally Posted by penchanted View Post

At some point it seems like they will have to do a distribution. On the other hand, they hired an M&A specialist so maybe we will be looking at a more acquisitive Apple.

I don't know. Steve and the board get asked this question at every stockholder's meeting. It's always been dodged before and I have little doubt it will be again this year. They couldn't spend over $50b on acquisitions even if they wanted to, and I hope to hell they don't want to.
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post #9 of 19
1/12/11 at 10:35pm
Quote:
Originally Posted by Dr Millmoss View Post

I don't know. Steve and the board get asked this question at every stockholder's meeting. It's always been dodged before and I have little doubt it will be again this year. They couldn't spend over $50b on acquisitions even if they wanted to, and I hope to hell they don't want to.

Agreed that it would be difficult to spend $50B. They could make a couple of substantial $4-5B buys, but I am not sure what they might be. They could probably tie up another $2B or so by prepaying for components. Even a major expansion of Apple Retail would barely put a dent on that coffer. That is really a hell of a lot of money to even ponder.
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post #10 of 19
1/13/11 at 8:29am
Quote:
Originally Posted by penchanted View Post

Agreed that it would be difficult to spend $50B. They could make a couple of substantial $4-5B buys, but I am not sure what they might be. They could probably tie up another $2B or so by prepaying for components. Even a major expansion of Apple Retail would barely put a dent on that coffer. That is really a hell of a lot of money to even ponder.

Right. The purpose of capital is reinvestment in growing a business. That's where a company should receive their best return on equity, and not by banking it -- unless they are a bank. If they're throwing off far more cash than they can use responsibly for growing the business, then some of that cash should go to the stockholders. One of the features of our currently stagnant economy is the record levels of cash being held on corporate books, a significant economic inefficiency. Apple is a leader in that category, if not the king of the cash-hoarders. They money should be put to good use one way or another. Apple's stockholders deserve a better answer than the one we're not getting.
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post #11 of 19
1/13/11 at 10:52am
Quote:
Originally Posted by Dr Millmoss View Post

... Apple's stockholders deserve a better answer than the one we're not getting.

So go voice your opinion to the board. I just got my invite... The shareholders meeting is Feb 23. (Not that I'll go, I like the way they're running things.)
From out there on the moon, international politics look so petty. You want to grab a politician by the scruff of the neck and drag him a quarter of a million miles out and say, "Look at that!" -...
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post #12 of 19
1/13/11 at 2:20pm
Quote:
Originally Posted by KingOfSomewhereHot View Post

So go voice your opinion to the board. I just got my invite... The shareholders meeting is Feb 23. (Not that I'll go, I like the way they're running things.)

That opinion has been expressed at every annual stockholder's meeting for the last several years. I don't need to go to the meeting just to be told to talk to the hand. I like the way they are running things too -- except for this.
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post #13 of 19
1/13/11 at 3:47pm
Quote:
Originally Posted by Dr Millmoss View Post

That opinion has been expressed at every annual stockholder's meeting for the last several years. I don't need to go to the meeting just to be told to talk to the hand. I like the way they are running things too -- except for this.

We really are in agreement here. But I can't help but thinking that Apple is going to make a big play and wants to do it all cash. Why else are they hoarding so much money (near-death experience notwithstanding).

A stock buyback makes no sense given the current stock price (if anything, a split is in order). A dividend seems to be the only thing that makes sense unless there is some unmentioned grand scheme.
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post #14 of 19
1/13/11 at 4:09pm
Quote:
Originally Posted by penchanted View Post

We really are in agreement here. But I can't help but thinking that Apple is going to make a big play and wants to do it all cash. Why else are they hoarding so much money (near-death experience notwithstanding).

A stock buyback makes no sense given the current stock price (if anything, a split is in order). A dividend seems to be the only thing that makes sense unless there is some unmentioned grand scheme.

As a stockholder, grand schemes in the form of huge money plays scare me. Consider that Apple hasn't gotten where they are today by taking over other companies. Very few of these matches are made in heaven. Most are made in that other place.

A buyback doesn't excite me either. We'd get more shareholder value from a dividend. The markets would like it too. I'm not suggesting that they airdrop the entire $50b on the stockholders (though I wouldn't refuse to sign the check), but 1% would sure be a welcome gesture. They could pay that with about ten weeks of cash flow and still have forty more weeks in the year to sock it away, even assuming they don't increase earnings, which of course they will.
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post #15 of 19
1/13/11 at 4:31pm
Quote:
Originally Posted by Dr Millmoss View Post

As a stockholder, grand schemes in the form of huge money plays scare me. Consider that Apple hasn't gotten where they are today by taking over other companies. Very few of these matches are made in heaven. Most are made in that other place.

I agree - the first thing that always comes to mind is AOL/Netscape/Time Inc. They are still unravelling that mess.

Quote:
A buyback doesn't excite me either. We'd get more shareholder value from a dividend. The markets would like it too. I'm not suggesting that they airdrop the entire $50b on the stockholders (though I wouldn't refuse to sign the check), but 1% would sure be a welcome gesture. They could pay that with about ten weeks of cash flow and still have forty more weeks in the year to sock it away, even assuming they don't increase earnings, which of course they will.

I would not mind a dividend either. I've been accumulating shares since the '90s. My parents have shares going back even further. I don't mind a company paying no dividend when they are making good use of their cash but, as you point out, Apple is seemingly just sitting on a pile of it that does little to build the company. I would feel differently if they were a bank (as you also pointed out). I actually had no reservations about the cash hoard until it got over $25B.

Maybe we will actually hear something different this year - either in terms of a dividend or Apple's strategic plans.
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post #16 of 19
1/13/11 at 4:39pm
FWIW, this subject gets debated quite a bit around here and you are just about the only person on these boards who agrees with me on this subject. Which means of course that we are both completely wrong.
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post #17 of 19
1/13/11 at 5:57pm
Quote:
Originally Posted by Dr Millmoss View Post

FWIW, this subject gets debated quite a bit around here and you are just about the only person on these boards who agrees with me on this subject. Which means of course that we are both completely wrong.

I think they just can't understand the difference between a company which has had previous cash-flow issues holding $25B and holding $50B. I think everyone initially understood why Apple wants to be debt-free and cash-rich but it is just out-of-proportion unless they truly are planning some "grand scene".

Hell, with the current cash hoard, Apple could afford to buy a dozen prime islands and build an idealized AppleWorld as the ultimate Apple enthusiast tourist destination but they'd still have $35B to $40B left in their coffers.
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post #18 of 19
1/13/11 at 11:04pm
Apple has been debt-free for ages now. They never carried much in the worst of times. I am often told in these discussions that it's great for company to have reserves against a future calamity. As if Apple needing a massive rainy-day fund is supposed to make us feel better about it. Or maybe Apple is saving for its retirement. Who knows?

I think it's the purpose of profits that aren't widely understood.
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post #19 of 19
1/18/11 at 10:52am
Quote:
Originally Posted by Dr Millmoss View Post

Apple has been debt-free for ages now. They never carried much in the worst of times. I am often told in these discussions that it's great for company to have reserves against a future calamity. As if Apple needing a massive rainy-day fund is supposed to make us feel better about it. Or maybe Apple is saving for its retirement. Who knows?

I think it's the purpose of profits that aren't widely understood.

I agree that Apple should return a portion of the large cash reserve they have to shareholders.

But, for the most part, I think they're pretty shrewd with their cash position. The business acquisitions have actually been the worse use of that money, IMO. The best use is when they're purchased components for iDevices at huge quantities and basically cornered the market. First it was the 2.5" drives that went in the iPods, then flash and most recently LCD screens for iPads. At some point they will do it again when some promising tech comes along that'll give their products an advantage.

My guess is that soon they'll be buying massive quantities of AMOLED panels. I think they're waiting for them to get a little better. Then they'll purchase so many the technology will become mainstream.
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