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Apple to distribute another $2.5 billion to shareholders via Thursday dividend

post #1 of 26
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Apple will pay shareholders its second dividend in 17 years tomorrow, distributing roughly $2.5 billion in $2.65 per share across the company's 935 million outstanding shares.

Flush with billions in cash it simply can't spend fast enough, Apple first announced plans for a dividend program in March, alongside a $10 billion share buyback program. Each quarter, the company stated it will pay its shareholders a $2.65 per share dividend. Shareholders of record will receive dividend payments tomorrow, November 15th.

Apple's chief executive Tim Cook noted that the company has "used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure. You?ll see more of all of these in the future.

?Even with these investments," he added, "we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program."

Can't spend fast enough to make a dent



Over the next three years, Apple has stated that its buyback and dividend plans will distribute $45 billion from its cash pile, with quarterly dividends handing out $2.5 billion per quarter.

Apple is earning new cash faster than it is paying out in dividends however, so its $2.5 billion in quarterly dividend payments has not reduced Apple's cash hoard over the past two quarters.

In the company's June quarter, Apple announced the accumulation of an additional $7 billion in cash, while in its most recent earnings report, it announced having piled up another $4.2 billion, leaving it with $121.4 billion in cash at the end of its fiscal 2012 as reported in October.

Apple will continue paying new quarterly dividends about a month and a half after the end of each subsequent quarter. A dividend equivalent will also be paid to holders of Apple's restricted shares, although Cook declined to collect dividend payments for the 1.125 million shares of restricted stock he has been granted, which would otherwise be worth over $75 million.

The company's current dividend payment rate is quite modest when compared to its current and future cash position. At the same time, Apple's $2.5 billion in quarterly dividend payments makes it one of the highest dividend payers in the U.S.
post #2 of 26
Even with the payout they are still accumulating more cash than pretty much every other company in the world.

I haven't heard much about the stock buybacks. Have those started?

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post #3 of 26
This is great news for consumers of the best products. Keeping shareholders fully invested and happy ensures Apple will be able to continue investing in the products of the future. I only hope Tim Cook goes further by announcing bigger dividends in 2013.
post #4 of 26
Does that mean if i bought the stock on 14th i still get it?
post #5 of 26

This is crazy. Do not burn money. I'm very disappointed with Tim Cook. They should use the money to innovate the products. Apple even could build a huge factory in the USA with $2.5 billions.

post #6 of 26
Quote:
Originally Posted by ksec View Post

Does that mean if i bought the stock on 14th i still get it?

No. You must own the stock one day before the ex-dividend date, which was November 7 iirc.

Hope Apple is buying back shares at these prices! Would love to be surprised in January that the share count has been reduced, and dividend increased.
post #7 of 26

Sweet.  I like getting the dividend, but not too happy with Apple's current share price.  I sure hope that wasn't the trade-off.

 

I'd love to see Apple be a little more aggressive with that reserve cash.  Companies like Nokia, Amazon and Google are spending cash to keep investor interest up, but Apple isn't doing much with their cash at all when it comes to acquisitions.  Nokia has a fine map app that they're hopefully bringing to iOS.  That would have been a good starting spot for Apple's Maps to begin at.  It would be nice if Apple could acquire something like that.  I'd really like to see Apple start building some fully-automated factories to keep up with product demand.  Foxconn is clearly slacking off and Apple can't afford to do that with its number one product iPhone.  There's just too much money and market share on the line to fall behind in production.

post #8 of 26
15 years tmr ?? Omg !!!
post #9 of 26
Quote:
Originally Posted by MiddleGuy View Post

This is crazy. Do not burn money. I'm very disappointed with Tim Cook. They should use the money to innovate the products. Apple even could build a huge factory in the USA with $2.5 billions.

Yes, it's horrible that Apple has decide to give a fraction of their profits back to shareholders instead of doing any innovating¡

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #10 of 26

$2.5bn? They could have bought 100 clockfaces for that!

post #11 of 26
Quote:
Originally Posted by ascii View Post

$2.5bn? They could have bought 100 clockfaces for that!

 

Such a waste, no?

 

I've spent a lot of money on booze, birds and fast cars.

 

The rest I just squandered.

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post #12 of 26
Quote:
Originally Posted by MiddleGuy View Post

This is crazy. Do not burn money. I'm very disappointed with Tim Cook. They should use the money to innovate the products. Apple even could build a huge factory in the USA with $2.5 billions.

 

Jesus Christ. Talk about a lack of perspective. You actually think Apple is grabbing money from it's "$$ we need to innovate" R&D pile to pay out it's dividends?? My God. It has $120+ Billion in the bank, more than any other company in existence.  Paying dividends is not going to have a shred of an effect on any innovation or R&D it's doing. As for the US factory, no, they couldn't, and if you htink so you're pretty clueless as to what that actually entails. Factory making what? iPads? I guess they'll have to build another 20 factories also, which make the parts that make the iPad/whatever. Or do you want them to ship the screws from the factory that makes them in China to the one in the US? The supply chain is a massive operation, they can't just build an isolated factory in the US. 

 

In summary, noone cares if you're dissapointed by Tim Cook, because you don't have a clue of what you're talking about, nor the most basic understanding of how a company is run and how it funds its operations. 

post #13 of 26
Quote:
Originally Posted by Slurpy View Post

 

Jesus Christ. Talk about a lack of perspective. You actually think Apple is grabbing money from it's "$$ we need to innovate" R&D pile to pay out it's dividends?? My God. It has $120+ Billion in the bank, more than any other company in existence.  Paying dividends is not going to have a shred of an effect on any innovation or R&D it's doing. As for the US factory, no, they couldn't, and if you htink so you're pretty clueless as to what that actually entails. Factory making what? iPads? I guess they'll have to build another 20 factories also, which make the parts that make the iPad/whatever. Or do you want them to ship the screws from the factory that makes them in China to the one in the US? The supply chain is a massive operation, they can't just build an isolated factory in the US. 

 

In summary, noone cares if you're dissapointed by Tim Cook, because you don't have a clue of what you're talking about, nor the most basic understanding of how a company is run and how it funds its operations. 

 

Jesus. Do you really think $2.65 per a share of $540 will help shareholders? Stock price fluctuates daily more than $6~$20. Dividend is a waste of money.

post #14 of 26
Quote:
Originally Posted by SolipsismX View Post

Even with the payout they are still accumulating more cash than pretty much every other company in the world.
I haven't heard much about the stock buybacks. Have those started?

 

Yup.

 

Do you remember when Tim Cook apologised for the Maps foul up, and the stock price tanked? The Apple buyback started the day after that.

post #15 of 26
I get that you investors are happy but it hasn't affected the share price all that much - the forward P/E is dropping like a stone. People buy growth stocks for capital gains, not dividends, and the problem with Apple becoming a dividend stock is that is presages a potential slowdown in growth. My beef with Cook is that he is very much a bean counter, a normal competent CEO, not an extraordinary one. I suppose you can't get that twice in a row.
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post #16 of 26
Quote:
Originally Posted by Rayz View Post

Yup.

Do you remember when Tim Cook apologised for the Maps foul up, and the stock price tanked? The Apple buyback started the day after that.

Cool. So APPLE is the one driving down the share price - so they can buy back shares more cheaply. 1smoking.gif
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post #17 of 26
The dividends are fine -- but I still think, unnecessary -- but IMHO, Apple should do a massive share repurchase at the current price.

Say, $50B worth.
post #18 of 26
Quote:
Originally Posted by anantksundaram View Post

The dividends are fine -- but I still think, unnecessary -- but IMHO, Apple should do a massive share repurchase at the current price.
Say, $50B worth.

They certainly aren't necessary but neither are buybacks. At this point both are good at helping stabilize the stock. Buying back $50 billion wouldn't be good. FIrst of all, that would have to be a one time buyback, not something they could do per quarter or year. Secondly, it would be too radical a change that could destabilize their stock. Finally, with Apple reportedly investing billions in many other companies for components buying back nearly half would reduce their coffers to a point I personally wouldn't be comfortable with. A tech company needs a deep cushion and I feel that $100 billion is a decent demarcation point for that.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #19 of 26
Quote:
Originally Posted by jragosta View Post

Cool. So APPLE is the one driving down the share price - so they can buy back shares more cheaply. 1smoking.gif

Oh no! Now someone will create a conspiracy around that and then others will sue Apple for deep-insider trading.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #20 of 26
Quote:
Originally Posted by MiddleGuy View Post

This is crazy. Do not burn money. I'm very disappointed with Tim Cook. They should use the money to innovate the products. Apple even could build a huge factory in the USA with $2.5 billions.

well, if you consider the dividend "throw-away" money, then yes after a year of dividends (if they are quarterly)
apple could have a factory in the usa. so i wonder if every single usa apple stock owner would give up their dividienf so that a usa factory could be made... (what is the percentage of usa apple stock holders)...
and if the usa stock holders will not Unanimously give up their stock dividends, then that will be a "the-people-have-spoken" Justification for not making apple products in the US...
post #21 of 26

As for stock price, everyone could see when this thing broke minimal support, the shorty hedge funds jumped on this thing big time.  The negative articles started spewing out non-stop.  Everyone is eyeing the $520-530ish level for support.  They are pounding it until then to make money.  Once that hits, and if we get agreement on the fiscal cliff, the stock will make a strong comeback.  I bought in at $50 years back.  Long and strong.

post #22 of 26
Quote:
Originally Posted by MiddleGuy View Post

This is crazy. Do not burn money. I'm very disappointed with Tim Cook. They should use the money to innovate the products. Apple even could build a huge factory in the USA with $2.5 billions.

 

There are many problems with the ways companies practice business today, but the lack of dividend paying by many very successful companies is a root cause of many of these issues.  Corporations focus entirely too much on just having a quarterly report "good enough" to promote a run-up in the stock price.  This means that they manipulate the media to produce good news.  This is a big part of why we have so much vaporware.

 

In a good and proper world of investing, there would be reason to simply buy and hold stocks and depend on them to provide reliable dividend income.

 

Of course part of the problem is the tax code, capital gains are taxed lower than dividends in general, so it's in your interest to make money based on buying and selling rather than owning a piece of a company that is truly doing well.

post #23 of 26

Aapl off almost 30% since peak.

post #24 of 26
Quote:
Originally Posted by MiddleGuy View Post

This is crazy. Do not burn money. I'm very disappointed with Tim Cook. They should use the money to innovate the products. Apple even could build a huge factory in the USA with $2.5 billions.


Keeping amounts on hand that outweigh their needs that many times over is even dumber. This isn't an either or thing. They can pretty much invest in whatever they want at this point. Paying a dividend is only a portion of it. Type C corporations can actually be penalized for holding too much cash with no real purpose via AET assessment. This would apply to straight cash, not assets/investments. Anyway they're way way over their operating expenses.

post #25 of 26

I think that the dividend is a bunch of crap. When the dividend was first announced a while back, I wrote that I wasn't sure if it was a good idea, and it certainly didn't make AAPL more attractive to me. If I'm buying into AAPL, I'm doing it because I believe in the company and the products, not because of some shitty, little dividend.

 

Who gives two shits about a lousy $2.65 per share? Just today the stock went down $11.26, the dividend doesn't mean crap. I also think that the dividend announcement was a sign of weakness from Apple, as Apple had been doing just fine without any dividends. And if Apple were first to give out a dividend, it should be much higher than a lousy $2.65 per share. Either give some decent percentage, or don't give anything at all. I'd prefer zero compared to what the dividend is today.

 

I also read all these great things when the dividend was first announced about how hedgefunds and other firms were going to start buying more into AAPL now, because of that dividend. That also turned out to be a bunch of crap predictions.

post #26 of 26
Quote:
Originally Posted by jcdinkins View Post

As for stock price, everyone could see when this thing broke minimal support, the shorty hedge funds jumped on this thing big time.  The negative articles started spewing out non-stop.  Everyone is eyeing the $520-530ish level for support.  They are pounding it until then to make money.  Once that hits, and if we get agreement on the fiscal cliff, the stock will make a strong comeback.  I bought in at $50 years back.  Long and strong.

Thats some of it, the rest is the capital gains in the US.

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