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Despite having $121B in cash, Apple not expected to issue special dividend

post #1 of 54
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With Apple's cash hoard swelling to more than $120 billion dollars, some investors have begun to hope that the company could issue an additional special dividend to shareholders. However, one analyst says while that decision would be welcome, it's very unlikely to happen.

Chris Whitmore of Deutsche Bank issued a note to investors on Monday after he received a number of inquiries regarding the potential for Apple to pay out a special dividend. The company currently has $121 billion in cash, and it's expected to grow to $156 billion in fiscal year 2013, ballooning past $200 billion a year later.

"In our view, Apple has ample capacity to pay a large special dividend and still grow net cash per share while buying back stock," Whitmore admitted, but he still doesn't think it will happen

Special dividends can be a short-term boost for a stock, but they do not tend to have a lasting benefit to shareholders. Whitmore believes Apple is more focused on building a track record of predictable dividend growth.

Deutsche


Another problem is about $83 billion of Apple's cash balance is offshore. The $45 billion Apple plans to spend on recurring dividends and share buybacks will be entirely domestic cash.

The company announced in March its plans to spend $45 billion over three years on dividends to investors, along with a share repurchase program. The decision was a change of course for Apple, which had long refused to pay out a dividend to shareholders.

Apple's quarterly dividend amounts to $2.65 per share, and payouts of $2.5 billion were issued to investors in August and November. They were Apple's first dividend payouts in 17 years.

But Apple is also earning cash faster than it can pay out its $2.5 billion in dividends per quarter, which means its cash hoard continues to grow. As of the end of its fiscal 2012, Apple had $121.4 billion ? a number that's expected to grow even more during the company's lucrative holiday quarter.

Investors are clamoring for a special dividend from Apple because the tax rate on such payments may increase from 15 percent to about 40 percent in January if the President George W. Bush-era tax cuts are allowed to lapse by congress and President Obama's administration.

However, Whitmore did admit that Apple has become increasingly "shareholder friendly," thanks in large part to its decision to pay out dividends. He views the company as an attractive buy for prospective investors, with a "buy" rating and a price target of $800.
post #2 of 54

Don't give 'em jack shit, after what they did to the stock recently. Manipulators, the lot of 'em.

Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #3 of 54
Quote:
Originally Posted by AppleInsider View Post

With Apple's cash hoard swelling to more than $120 billion dollars,

 

You can never be too careful, right? $120 billion may sound a lot but who knows? One day you might just wake up and need $150 billion! Then what are you gonna do?

post #4 of 54
Originally Posted by paxman View Post
One day you might just wake up and need $150 billion! Then what are you gonna do?

 

Wait a month.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #5 of 54
If you wake up suddenly needing $150B, you should be fired.
post #6 of 54

No dividend, just $600 memory upgrades and we will make it really hard for you to do it yourself.   Whoooohoooo....

post #7 of 54

Pretty sizeable war chest, I'd say.  Apple should start shopping around for a company in the mobile payments arena.

post #8 of 54
Quote:
Originally Posted by Tallest Skil View Post

 

Wait a month.

Well, that is true. But what if you just can't wait? What if you just must have that cash right NOW? Then what?

post #9 of 54
Originally Posted by Macboy Pro View Post
No dividend, just $600 memory upgrades and we will make it really hard for you to do it yourself.   Whoooohoooo....

 

We need to have melgross do a post on why on-board RAM is a better idea than carded RAM. That way we can reference it every time this comes up.


Originally Posted by paxman View Post
Well, that is true. But what if you just can't wait? What if you just must have that cash right NOW? Then what?

 

I'll expound on what jbruni said and say that if you wake up suddenly needing even THIRTY billion, you should be fired.

 

There's no situation in which Apple will suddenly be required to need more cash than it has. It just isn't happening.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #10 of 54
Quote:
Originally Posted by Tallest Skil View Post

 

We need to have melgross do a post on why on-board RAM is a better idea than carded RAM. That way we can reference it every time this comes up.

 

I'll expound on what jbruni said and say that if you wake up suddenly needing even THIRTY billion, you should be fired.

 

There's no situation in which Apple will suddenly be required to need more cash than it has. It just isn't happening.

 

Tell that to Enron.

post #11 of 54
I think they will increase the quarterly dividend next year, and the year after that, and the year after that, etc.
post #12 of 54
Quote:
Originally Posted by allenbf View Post

Quote:
Originally Posted by Tallest Skil View Post

We need to have melgross do a post on why on-board RAM is a better idea than carded RAM. That way we can reference it every time this comes up.

I'll expound on what jbruni said and say that if you wake up suddenly needing even THIRTY billion, you should be fired.

There's no situation in which Apple will suddenly be required to need more cash than it has. It just isn't happening.

Tell that to Enron.

Other than both being publicly traded corporations, what do you think Enron and Apple have in common to make your reference relevant?
post #13 of 54
Quote:
Originally Posted by Macboy Pro View Post

No dividend, just $600 memory upgrades and we will make it really hard for you to do it yourself.   Whoooohoooo....

Bullshit! There is no $600 memory upgrade that is really hard to do yourself.

"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 #14 of 54
Originally Posted by quinney View Post
Other than both being publicly traded corporations, what do you think Enron and Apple have in common to make your reference relevant?

 

"Corruption, sleaziness, and a disregard for its patrons". lol.gif

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #15 of 54
Quote:
Originally Posted by Tallest Skil View Post

I'll expound on what jbruni said and say that if you wake up suddenly needing even THIRTY billion, you should be fired.

 

There's no situation in which Apple will suddenly be required to need more cash than it has. It just isn't happening.

 

OK, then, I give up. I guess I won't get my 150 billion when I wake up (if I want to keep my job), but 29? AND keep my job? Done deal!

 

I kid, of course. To be quite honest, much as I love all things Apple I question the morality of sitting on such wealth. Perhaps an Apple tax should be levied against Apple. Perhaps Apple should be required to hand over an iPad mini to every financially struggling family in the US. Or perhaps they should have to pay an annual tax to subsidize college education for hard up kids. It wouldn't make Apple any less successful. Perhaps over time it would turn out to  be a great investment that could benefit even more people as well as Apple. 

 

Just thinking aloud....

post #16 of 54
Sooo... What Apple is NOT doing is now news?

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #17 of 54
The idea that they would give a special, last-minute dividend to allow stockholders to save on taxes is asinine. Hopefully though they are taking advantage of the depressed share price with buybacks at least.

With just $100B they could buy Visa...
post #18 of 54
Quote:
Originally Posted by aaarrrgggh View Post

The idea that they would give a special, last-minute dividend to allow stockholders to save on taxes is asinine. Hopefully though they are taking advantage of the depressed share price with buybacks at least.
With just $100B they could buy Visa...

They could make their Passbook really shine with Visa but I think a better move would just to partner with V, MC et al. (which they already do with iTS anyway).

They could buy TMSC or just start their own. It would probably take them at least half a decade to get it up and running well but making their own chips would be a huge advantage.

How about a company like LG, whom I think they already have been investing in to create their Retina displays which are built by other companies?

"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 54
Quote:
Originally Posted by paxman View Post

You can never be too careful, right? $120 billion may sound a lot but who knows? One day you might just wake up and need $150 billion! Then what are you gonna do?

Can you come up with a situation in which that could occur?
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"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #20 of 54

Cant find the IZGO apple TV news, where is it?  Just saying because I hope Apple will use this tech in the next iPads and iphone. 

post #21 of 54

1) Buy Microsoft and put its consumer division to rest, integrate iOS in to Exchange/Sharepoint etc replace Windows with OSX

 

or

 

2) Buy Twitter and Facebook

 

3) Merge with Google (kill Motorola)

 

4) Buy Amazon and Yahoo

 

5) Buy Samsung , kill Galaxy line

 

5)  wait and see mode a few years until cash hoard is > stock valuation

post #22 of 54
Quote:
Originally Posted by AppleInsider View Post

Special dividends can be a short-term boost for a stock, but they do not tend to have a lasting benefit to shareholders. Whitmore believes Apple is more focused on building a track record of predictable dividend growth.
 

I like this line best.  

 

Does having cash in ones pocket not provide a lasting benefit?  Does the person behind that ridiculous line claim to have investigated what good was done by the typical dividend?  Higher stock price is not the only benefit that can be provided to a shareholder!

post #23 of 54
Quote:
Originally Posted by allenbf View Post

 

Tell that to Enron.

Uh... exactly!

 

So if Apple has 100b in the bank, and gets fined 100b, then the fine gets paid.  If it distributes 100b to shareholders today, and gets fined tomorrow, guess who gets the money?  Shareholders!

post #24 of 54

Will Apple consider creating its own manufacturing/assembly facilities? 

 

Will a well funded LG/Sharp/etc by Apple component orders eventually be another 'tier 1' competitor like Samsung?

post #25 of 54
Quote:
Originally Posted by OriginalG View Post

Will Apple consider creating its own manufacturing/assembly facilities? 

 

Will a well funded LG/Sharp/etc by Apple component orders eventually be another 'tier 1' competitor like Samsung?

Doing that will wipe $100b off the market cap in no time.

post #26 of 54
Originally Posted by paxman View Post

…have to pay…

 

Nope.


Originally Posted by Paul94544 View Post
1) Buy Microsoft and put its consumer division to rest, integrate iOS in to Exchange/Sharepoint etc replace Windows with OSX

 

2) Buy Twitter and Facebook

 

3) Merge with Google (kill Motorola)

 

4) Buy Amazon and Yahoo

 

5) Buy Samsung , kill Galaxy line

 

6)  wait and see mode a few years until cash hoard is > stock valuation

 

1, 3, and 5 would be blocked, 2 would be blocked if it was both (or even not, really). 4 could happen, but they should wait until Amazon completely collapses and get it for pocket change.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #27 of 54
Quote:
Originally Posted by Tallest Skil View Post

 

Nope.

 

1, 3, and 5 would be blocked, 2 would be blocked if it was both (or even not, really). 4 could happen, but they should wait until Amazon completely collapses and get it for pocket change.

Why would a company making 40 cents a profit on every dollar of revenue want to buy any company that is making so little as those other companies are?  So stupid!  

 

Anyone suggesting these large mergers should do yourselves a favor and read up on the results of big corporate technology mergers.


Edited by cameronj - 12/3/12 at 2:50pm
post #28 of 54
Originally Posted by cameronj View Post
Why would a company making 40 cents a profit on every dollar of revenue want to buy any company that is making so little as those other companies are?  So stupid!  

 

Do yourselves a favor and read up on the results of big corporate technology mergers.

 

Thanks for pretending it was my idea.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #29 of 54
Quote:
Originally Posted by SolipsismX View Post


Bullshit! There is no $600 memory upgrade that is really hard to do yourself.


 

No need to use that foul language but here is the picture from Apples site.   I could do that on my new iMac 21 if I didnt have to unglue the screen, remove the fan and the logic board.   Instead, I can pay $200 for 16GB of RAM (which really costs $70 or less) and I cant even order 32GB RAM on the 21 even though it supports it.  Not interested in arguing, but wanted to show you what I was talking about.    I just find it funny that Apple being greedy is always ok :-)

post #30 of 54
Quote:
Originally Posted by Macboy Pro View Post


No need to use that foul language but here is the picture from Apples site.   I could do that on my new iMac 21 if I didnt have to unglue the screen, remove the fan and the logic board.   Instead, I can pay $200 for 16GB of RAM (which really costs $70 or less) and I cant even order 32GB RAM on the 21 even though it supports it.  Not interested in arguing, but wanted to show you what I was talking about.    I just find it funny that Apple being greedy is always ok :-)

So where is this $600 you mention?

And $70 or less to do it yourself? Go right ahead but don't pretend that vendors don't charge more than you can buy separately.

No, the 21/5" iMac does not support 32GB because there are now 16GB sticks at this time. There is no conspiracy, Apple isn't out to get you so stop spreading this bullshit!

"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

Reply

"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

Reply
post #31 of 54

I'm long on Apple yet I'm not clamoring for a special dividend. The stock manipulators probably want one.

post #32 of 54
Quote:
Originally Posted by cameronj View Post

I like this line best.  

 

Does having cash in ones pocket not provide a lasting benefit?  Does the person behind that ridiculous line claim to have investigated what good was done by the typical dividend?  Higher stock price is not the only benefit that can be provided to a shareholder!

If i get a $200 dividend. I might just waste it on food and/or lap dances and thus a week from now I don't have the $200.

post #33 of 54
Quote:
Originally Posted by jungmark View Post

If i get a $200 dividend. I might just waste it on food and/or lap dances and thus a week from now I don't have the $200.

And that's your right (though I would say if you spend it on food, you haven't wasted it, and the lap dancer you give it to will probably not consider it wasted either).

 

And I might take my dividend and use it to buy christmas presents.  Or I might put it in the bank so my bank can lend it out to someone who has a business idea.  Or I might buy a different stock with it.  The point is, sitting in money market funds, it's doing me NO good.  So having it my pocket is sure to do me more good than that.

 

If I REALLY think that I can not do anything productive with it... then I'll buy more Apple stock with it!  Point is, with it in MY hand I can do whatever I want with it, including *decide* to let Apple manage it for me.  Unlike now, when that's my only "choice"

post #34 of 54

Us shareholders are better served with them investing in manufacturing and supplies, to R&D of new products.

post #35 of 54
Quote:
Originally Posted by jungmark View Post

I'm long on Apple yet I'm not clamoring for a special dividend. The stock manipulators probably want one.

 

I am also long AAPL, yet I would like a special dividend.  I'd much rather pay 15% tax now on a dividend (a historic low) than a higher (perhaps 40%) rate in the future.  (And no, I'm not some 'manipulator', just a guy that's bought, and bought AAPL for years.)  And if you use a DRIP, you're buying more of the stock at an undervalued price.  Don't get me wrong, AAPL should keep as much money as they think they will ever need on hand.  But they already have more cash on hand than the market capitalization of the smallest 466 companies in the S&P500.  Perhaps that's a bit much.   

post #36 of 54
Quote:
Originally Posted by mdriftmeyer View Post

Us shareholders are better served with them investing in manufacturing and supplies, to R&D of new products.

Better served than what?  Than having it in a bank?  Because those are the two options - sitting in a bank gathering dust, or returned to shareholders.  Investing in those things you mentioned is funded 100 times over just out of current cash flow, not touching the cash pile.

post #37 of 54
Quote:
Originally Posted by mdriftmeyer View Post

Us shareholders are better served with them investing in manufacturing and supplies, to R&D of new products.

 

Agreed.  But at some point (<$121B), it becomes hard to intelligently invest that money.   Spend money if it will provide a return, but don't just spend it to spend it.

post #38 of 54

"With Apple's cash hoard swelling to more than $120 billion dollars..."

 

 

Well, quite a bit of this billion is hidden/overseas' money with unpaid taxes tacked on. And, the minute it shows up on US soil, that very minute part of it will go to the Fed's pocket.


Edited by fireside - 12/3/12 at 11:00pm
post #39 of 54
Quote:
Originally Posted by fireside View Post

"With Apple's cash hoard swelling to more than $120 billion dollars..."

 

 

Well, quite a bit of this billion is hidden/overseas' money with unpaid taxes tacked on. And, the minute it shows up on US soil, that very minute it will go to the Fed's pocket.

This is true, except that the only way it's ever going to show up on US soil is if the taxes owed on it are forgiven.  The US government knows this, but it's waiting to see who wins this game of chicken.  Guess which party can wait longer?

post #40 of 54
Quote:
Originally Posted by Tallest Skil View Post

 

Thanks for pretending it was my idea.

He always does that kind of thing.

Quote:
Originally Posted by mdriftmeyer View Post

Us shareholders are better served with them investing in manufacturing and supplies, to R&D of new products.

It's not like they can re-invest all of that in terms of infrastructure. Some of it might be to provide a buffer, given that the iphone alone makes up the majority of their operating income. I'm saying it might be there in case they need to make any drastic changes. It also keeps some of the doom and gloom talk down. I'm amazed by some of the things that bring it up.

Quote:
Originally Posted by cameronj View Post

This is true, except that the only way it's ever going to show up on US soil is if the taxes owed on it are forgiven.  The US government knows this, but it's waiting to see who wins this game of chicken.  Guess which party can wait longer?


They can both pretty much wait indefinitely or at least until they've worked out a plan in the longer term for how to better handle corporate profits that either originate overseas or end up there in the form of payments to wholly owned subsidiaries. Just declaring a tax holiday every few years and putting off a long term solution isn't a great idea.

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