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Apple increases dividend by 15%, boosts capital return spending to $100B through 2015 - Page 3

post #81 of 88
Quote:
Originally Posted by igriv View Post

 

I am sorry, you don't have ANY idea what you are talking about.

 

I am sorry, you don't have ANY creds in hand to actually make that statement (to anyone else but yourself).

 

You, who characterized Apple's "cash hoard" as a bunch of money sitting in a pile gathering dust and losing value (proving beyond ALL doubt that Tim Cook and Peter Oppenheimer are financial incompetents).

 

Yeah… right. That...

 

So now we're supposed to believe you are qualified to make the above judgement…? Bwaaa ha ha.

post #82 of 88
I personally would rather have the $60 billion given out as dividends over a 21/2 year period. If I had 100 shares of AAPL and received such a dividend, I would receive $865 each quarter ($2.65 reg dividend plus my cut of the $60 B). I would happily pay the income tax. Then I could use what's left to either buy more Aapl stock or some other company. In contrast, with the share buy back program, when its all over, I'll have a 100/850,000,000 share of the company rather than a 100/1,000,000,000 share. That doesn't excite me as much as getting a check for $865 each quarter. And given the reaction to the company's announcement yesterday, I'd say I'm in the majority.
post #83 of 88
Quote:
Originally Posted by insider7 View Post

I personally would rather have the $60 billion given out as dividends over a 21/2 year period. If I had 100 shares of AAPL and received such a dividend, I would receive $865 each quarter ($2.65 reg dividend plus my cut of the $60 B). I would happily pay the income tax. Then I could use what's left to either buy more Aapl stock or some other company. In contrast, with the share buy back program, when its all over, I'll have a 100/850,000,000 share of the company rather than a 100/1,000,000,000 share. That doesn't excite me as much as getting a check for $865 each quarter. And given the reaction to the company's announcement yesterday, I'd say I'm in the majority.

 

Problem is if they do a special dividend people will just buy the stock and then sell it once the dividend is paid.  If they increase the regular dividend it would be very difficult to decrease the dividend down the line.  I'm going to back up Warren Buffett on this one.  He himself told Jobs that if your company is being undervalued by the market and if you have excess cash you should buyback.  A dividend will move the price up in the short-term (6-12 months) but a buyback will yield much better results in the long term (2-4 years).  By the end of 2015 Apple would have bought back about 10-15% of the shares.  That will translate to 10-15% increase in EPS if all things are equal.

 

If Apple still has excess cash in 2015 I would not be surprised if they do another $60B buyback.  I would not be surprised if they increase the dividend in 2014 and 2015 also.

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post #84 of 88
Quote:
Originally Posted by igriv View Post

 

What is particularly amusing is that Apple did not even get the highest credit rating. Talk about loss of confidence...

 

While that does seem a bit odd at first glance, there are only four (I believe) AAA rated companies in the U.S. right now: ADP, Exxon, J&J and (wait for it!)... Microsoft. I haven't yet dug through the interwebs to determine the logic behind Microsoft's debt being rated AAA and Apple's being AA+.

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post #85 of 88
Quote:
Originally Posted by majjo View Post


You're not looking at this the right way then. Buyback is much better on the long term.
That 2.65 dividend, instead of being split 1,000,000,000 ways, its being split 850,000,000 ways. So each share is worth more. At 100 shares, your check will be $312, an increase of $47.

It's important to note that this increase is permanent (as long as aapl pays a dividend). So, in 13 quarters, you would have made more than a one time 600 dollar payout.

 

I'm not sure that I would look at any dividend increase (or decrease) as being "permanent". Each quarter the board determines and declares a dividend. It could be higher, lower or the same as previous quarters. What I would say is that APPL's dividend at this payout level is relatively safe.

 

As a shareholder, I'm not that unhappy right now. I'd be happier at $650/share, but that's water under the bridge for right now. From a financial standpoint, I believe the stock has probably established a floor of sorts around $400 and there shouldn't be much more downside... unless the guy in the big chair begins impersonating Steve Ballmer on a daily basis. But ration and reason aside, as an Apple fan, I am jonesing for more cool, new, whiz-bang products and software, just like every other Apple fan. And to be honest, products that recapture the public's attention should also support the stock. But the most important thing right now is to not do anything (else) that results in any more apologies or egg on the face. Cook does need to get a handle on that situation... for PR reasons, if for no other reason.

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post #86 of 88
Quote:
Originally Posted by igriv View Post

 

What is particularly amusing is that Apple did not even get the highest credit rating. Talk about loss of confidence...

 

"Loss" of confidence? Did they DROP from a previous triple A rating? Only Nations and a very VERY few corporations have enjoyed a full AAA rating… please...

 

The fact that they have an AA+ rating flies in the face of your comment. That alone shows huge confidence in the strength of the company. Why are you so constantly and cynically and negatively chipping away here?

post #87 of 88
Quote:
Originally Posted by tribalogical View Post

 

"Loss" of confidence? Did they DROP from a previous triple A rating? Only Nations and a very VERY few corporations have enjoyed a full AAA rating… please...

 

The fact that they have an AA+ rating flies in the face of your comment. That alone shows huge confidence in the strength of the company. Why are you so constantly and cynically and negatively chipping away here?

 

because he's being paid by Samsung

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post #88 of 88
Quote:
Originally Posted by igriv View Post

 

And what WAS the pile of cash doing? Please enlighten me, since you know so much more about it.

 

I'm not likely to "enlighten" you, but I can explain my opinion…

 

There isn't a 'past tense' there. Their "Cash Reserves" ARE held in Marketable Securities, et al…? Those earn interest and other returns. Typically those earnings more than offset any 'losses' due to inflation, etc. That's the most competent way to manage Cash Reserves. And it's that simple, really.

 

It's the opposite of how you characterized it, which was something like "...sitting there losing value… blah blah… financial incompetence…" Um, no?

 

I'm not saying they aren't keeping a somewhat excess reserve. But really, how much is too much? That's certainly open to valid debate (all assumptions aside). As I said, I like their plan for a larger dividend and capital return of $100 billion over the next 30 months. Unlike you, I'm also fine with the size of their reserve being as large as it is, and that it might even grow during the next 30 months. Whatever. That isn't what I'm going to judge their overall performance and position on.

 

Again it's probably about perception. You see it as a "cash pile", which is actually a gross misrepresentation. I probably see it more as Apple does. As a Cash Reserve.

 

Cash Reserves should be treated as exactly that. You know, as Reserves? So when a cash reserve "sits", it's doing exactly what it should. Remaining safely on hand for a time when it's needed. But it isn't losing value in the meantime, as you implied, due to those securities earning over time.

 

 

Clear enough for you?

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