Apple to spend $45B over 3 years on dividend & share repurchase program

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  • Reply 141 of 182
    backtomacbacktomac Posts: 4,579member
    Quote:
    Originally Posted by melgross View Post


    Yeah, we know, we know. But dividends are always referred to in percentage. Thats not me, that's how it works. I don't know how he got 10%. It's actually more.



    I was using round numbers to try to make things simple but oh well.
  • Reply 142 of 182
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by backtomac View Post


    I was using round numbers to try to make things simple but oh well.



    I didn't start reading this discussion until the end but as long as you qualifier your comments to indicate how you got 10% I'd say it's accurate. Example, "Based on my buy in I'll be earning over 10% per year on my initial investment."
  • Reply 143 of 182
    backtomacbacktomac Posts: 4,579member
    Quote:
    Originally Posted by SolipsismX View Post


    I didn't start reading this discussion until the end but as long as you qualifier your comments to indicate how you got 10% I'd say it's accurate. Example, "Based on my buy in I'll be earning over 10% per year on my initial investment."



    I thought I was being pretty clear (see my post 132) but I apologize if I was confusing.
  • Reply 144 of 182
    Quote:
    Originally Posted by Godzilla View Post


    I was just thinking about this. One has to wonder whether Steve knew that this was in Apple's future. My hunch and feeling, especially gauging how passionate and true to form Tim Cook is, is that he did.



    Below is one of the quotes from the discussion on the Asymco site that I think may apply -- In 2 years, Likely, Apple's cash balance will be back to where it is today. They may have missed an opportunity for investment -- but the cash was just sitting there, earning minimal return. Appaently, Apple couldn't find anything significant (for their needs) in which to invest that cash.



    Quote:

    FalKirk



    Here is what Tim Cook has done at a cost of $45 billion over three years:



    1) Taken a contentious item off the table, mollifying stockholders while still allowing Apple to continue to grow its cash pile.



    2) Preserved from taxation all of the cash held outside of the U.S.



    3) Added a new class of dividend-only institutional investor.



    Overall, I conclude that this is a strategic maneuver. Sometimes an immediate concession provides a long-term strategic advantage.



  • Reply 145 of 182


    All this discussion of dividend yield percentage is making my head spin.



    I have some AAPL that I bought in 2003 for $17 -- if I use the $17 as a base for the yield then $10.60/year would be 62%.



    But, there was no dividend when I bought the shares or for the next 9 years -- so that's actually 7% yield per year less the time/value of money.



    I also bought some AAPL recently at $392, $446, $476 and $518...



    I guess my point is that when I look to purchase a stock for income, I look at the dividend in effect at the time of purchase.



    All of my AAPL were purchased for growth, so any dividend is just a bonus (albeit one with tax implications).



    I would be happier with a DRIP as that would be consistent with the reason I bought the stock.

  • Reply 146 of 182
    backtomacbacktomac Posts: 4,579member
    Quote:
    Originally Posted by Dick Applebaum View Post


    All this discussion of dividend yield percentage is making my head spin.



    I have some AAPL that I bought in 2003 for $17 -- if I use the $17 as a base for the yield then $10.60/year would be 62%.



    Yep. Even though you did not anticipate the dividend its a pretty nice windfall no? Did you expect those shares to rise to nearly $600?
  • Reply 147 of 182
    slang4artslang4art Posts: 376member
    Quote:
    Originally Posted by thataveragejoe View Post


    Kind of. If Congress did nothing and companies needed to bring money back they would just have to suck it up, no? That makes what you say more an opinion and not really fact. If companies just continually waited for tax holidays what's the point of having rules at all? Whole thing seems like a joke. No wonder we're in such a mess.



    We're in this mess largely because of the ridiculous amount of taxes that exist in general...
  • Reply 148 of 182
    Quote:
    Originally Posted by backtomac View Post


    Yep. Even though you did not anticipate the dividend its a pretty nice windfall no? Did you expect those shares to rise to nearly $600?



    Not the original $17 ones... but certainly the more recent purchases! Market closed at $601.10... After market 602.36.... $603.56.



    Not a big movement or a lot of trades... Gonna' watch and see what happens for a while.
  • Reply 149 of 182
    Quote:
    Originally Posted by backtomac View Post


    Its pretty simple. If you bought shares at $80, Apple will start paying over 10 per year in dividends per share. That's over 10%. An individual's dividend yield is calculated based on the purchase price not todays closing price.



    I think you need to figure out the notion of opportunity cost.



    Anyway, if you think you're getting a better deal, good for you! Be happy.
  • Reply 150 of 182
    Quote:
    Originally Posted by SolipsismX View Post


    I didn't start reading this discussion until the end but as long as you qualifier your comments to indicate how you got 10% I'd say it's accurate. Example, "Based on my buy in I'll be earning over 10% per year on my initial investment."



    You do need to ponder the difference between "Based on my buy in I'll be earning over 10% per year on my initial investment.." and "Based on my buy in I'll be earning over 10% per year on my initial investment after I spent 10 years waiting for it."
  • Reply 151 of 182
    9secondko9secondko Posts: 929member
    Quote:
    Originally Posted by anantksundaram View Post


    One thing I am super happy about: they didn't announce some large acquisition.



    That would have been a terrible move.



    Maybe if it was a lame acquisition.



    As it is, Apple should just buy Google and get it over with.
  • Reply 152 of 182
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by anantksundaram View Post


    You do need to ponder the difference between "Based on my buy in I'll be earning over 10% per year on my initial investment.." and "Based on my buy in I'll be earning over 10% per year on my initial investment after I spent 10 years waiting for it."



    It wasn't an option then so it doesn't count. Plus, my statement didn't mention anything about all years one has held the stock. As of the time this is counted you'll get $10.60 per share per year. I hope you aren't suggesting Apple owes you that much per share per year you've held the stock.
  • Reply 153 of 182
    Quote:
    Originally Posted by Dick Applebaum View Post


    All this discussion of dividend yield percentage is making my head spin.



    I have some AAPL that I bought in 2003 for $17 -- if I use the $17 as a base for the yield then $10.60/year would be 62%.



    But, there was no dividend when I bought the shares or for the next 9 years -- so that's actually 7% yield per year less the time/value of money.



    I also bought some AAPL recently at $392, $446, $476 and $518...



    I guess my point is that when I look to purchase a stock for income, I look at the dividend in effect at the time of purchase.



    All of my AAPL were purchased for growth, so any dividend is just a bonus (albeit one with tax implications).



    I would be happier with a DRIP as that would be consistent with the reason I bought the stock.



    I sympathise. Truly.



    Here's a simple example that might (or not!) help to clear things up. Suppose a stock you bought for $100 went up to $120 in Year 2, and to $144 Year 3. Suppose that the stock paid $5 in dividends in Year 2 and Year 3.



    What is your total shareholder return (TSR) between Years 1 and 2? It would be calculated as [(120 ? 100)/100 + (5/100)] ? 1 = 20% + 5% = 25%.



    What is your total shareholder return (TSR) between Year 2 and 3? [(144 ? 120)/100 + (5/120)] ? 1 = 20% + 4.17% = 24.17%.



    See how the TSR fell in the second year (i.e., it's not the original 25% anymore)? This is the conventional way to calculate it.



    Another way to calculate is would be as an annualized "holding period return" of a compounded annual growth rate (CAGR). Suppose you bought and held for 2 years. Your 2-year return was [(144 ? 100)/100 + 10/100] ? 1 = 44% + 10% = 54%. The CAGR from this holding would be: √(1.54) ? 1 = 24.1%.



    Notice it's not 25%?
  • Reply 154 of 182
    Quote:
    Originally Posted by SolipsismX View Post


    It wasn't an option then so it doesn't count. Plus, my statement didn't mention anything about all years one has held the stock. As of the time this is counted you'll get $10.60 per share per year. I hope you aren't suggesting Apple owes you that much per share per year you've held the stock.



    As I said, you need to ponder the difference.... I don't know how else to explain this!
  • Reply 155 of 182
    cityguidecityguide Posts: 129member
    @Dick Applebaum



    Quote: "Sigh! My late wife, Lucy -- the love of my life, was Croatian (dark hair, tan complexion and amazing blue eyes)... She was beautiful, stubborn, open to anything, funny... and a wink and smile that would melt the hardest heart!





    Condolences for your loss..and sharing this deepens the poignancy of your signature.
  • Reply 156 of 182
    Quote:
    Originally Posted by anantksundaram View Post


    I sympathise. Truly.



    Here's a simple example that might (or not!) help to clear things up. Suppose a stock you bought for $100 went up to $120 in Year 2, and to $144 Year 3. Suppose that the stock paid $5 in dividends in Year 2 and Year 3.



    What is your total shareholder return (TSR) between Years 1 and 2? It would be calculated as [(120 ? 100)/100 + (5/100)] ? 1 = 20% + 5% = 25%.



    What is your total shareholder return (TSR) between Year 2 and 3? [(144 ? 120)/100 + (5/120)] ? 1 = 20% + 4.17% = 24.17%.



    See how the TSR fell in the second year (i.e., it's not the original 25% anymore)? This is the conventional way to calculate it.



    Another way to calculate is would be as an annualized "holding period return" of a compounded annual growth rate (CAGR). Suppose you bought and held for 2 years. Your 2-year return was [(144 ? 100)/100 + 10/100] ? 1 = 44% + 10% = 54%. The CAGR from this holding would be: √(1.54) ? 1 = 24.1%.



    Notice it's not 25%?



    I understand... but I was trying to look at dividend yield -- not growth.
  • Reply 157 of 182
    backtomacbacktomac Posts: 4,579member
    Quote:
    Originally Posted by anantksundaram View Post


    I think you need to figure out the notion of opportunity cost.



    Anyway, if you think you're getting a better deal, good for you! Be happy.



    Its not opportunity cost because the dividend is icing on the cake. I bought those shares with no promise or guarantee of capital appreciation or dividend payments.



    Your trying to minimize the effect of the dividend on the long term shareholders but I assure you that investors that bought in years ago are going to be very happy when those checks come.
  • Reply 158 of 182
    melgrossmelgross Posts: 33,508member
    Quote:
    Originally Posted by Slang4Art View Post


    We're in this mess largely because of the ridiculous amount of taxes that exist in general...



    Look at it this way. We have higher corporate taxes and lower personal taxes. Most other developed countries have lower corporate taxes and higher personal taxes. Choose your poison.
  • Reply 159 of 182
    stelligentstelligent Posts: 2,680member
    Quote:
    Originally Posted by jragosta View Post


    Sorry, but I live in the real world. For example, you were talking about how much dividends would increase share values - while Apple shareholders largely yawned (certainly not the 15% you and others were talking about).. That coincides with the real world evidence I provided.



    Furthermore, you don't understand the scenario. Shares are NOT being taken out of circulation in this case. Apple has stated that they will be buying the shares to redistribute them to employees.







    Again, you're not paying attention.



    Apple has 932 M in shares right now. They're going to buy back something like 20 M of them. You could pretend that the money has disappeared. But you have to look at the alternative. If they don't buy the shares back, they will issue 20 M shares to give away to employees - which dilutes the share value. So the $10 B is being spent to prevent issuance of 20 M in new shares - so there is value retained for individual shareholders.



    That sounds right (don't understand anyone who disputes this interpretation). Here's what I don't get - $10B to buy back shares that will (might?) be distributed to employees. $10B worth of stock/options for employees?
  • Reply 160 of 182
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by anantksundaram View Post


    As I said, you need to ponder the difference.... I don't know how else to explain this!



    The difference is obvious. What's not obvious is why one would except something new, that hasnt been issued, to be diluted over the past decade. The value to the stock holder starts when the dividend is issued, not at some prior date. You get $10.60 per share per year until they say otherwise. It's that simple.
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