Apple distributed another $2.6 billion in dividends to shareholders on Thursday
Apple paid its shareholders another quarterly dividend on Thursday, although the total payout was reduced by millions due to billions of dollars worth of stock buybacks over recent quarters.
Source: Apple
According to the last figures reported by YCharts.com, Apple had 891.99 million outstanding shares in mid January. However, since reporting record earnings in late January, Apple's chief executive Tim Cook announced the company had taken advantage of short term trading panic to buy back $14 billion worth of its own stock.
Following earnings reports, Apple stock tumbled from $550 to slightly below $500 for one week. At those prices, Apple's $14 billion could have bought up an additional 28 million shares, bringing Apple's outstanding share count down toward 860 million shares. Apple shares have since recovered to $544.
After buying back shares, Apple doesn't need to pay dividends for them any more, meaning the most recent buyback trimmed around $85.4 million off the total cost of its total quarterly dividend payment. For the remaining roughly 860 million shares, Apple paid shareholders "of record" by the ex-dividend date last week a $3.05 dividend per share, totaling around $2.6 billion.
Flush with billions in cash it simply can't spend fast enough, Apple first announced plans for a dividend program nearly two years ago in March, alongside a $10 billion share buyback program. It was the first time the company had paid a dividend in 17 years. Each quarter, the company initially stated it would pay its shareholders a $2.65 per share dividend.
In an earnings conference call last year, the company's chief executive Tim Cook announced that, after paying out more than $10 billion over the previous year in dividends, the company would launch "an aggressive plan that more than doubles the size of the [existing] capital return program."
Cook said "the vast majority of our incremental cash return will be in the form of share repurchases," explaining that "as the Board and management team deliberated among the various alternatives to returning cash, we concluded that investing in Apple was the best. In addition to share repurchases, we are increasing our current dividend by 15% to further appeal to investors seeking yield."
He added, "while we continue to generate cash in excess of our needs to operate the business, invest in our future and maintain flexibility to take advantage of strategic opportunities, we remain firmly committed to our objective of delivering attractive returns to shareholders through both our business performance and the return of capital."
A report by the Dividend Daily stated that Apple's dividend program has attracted new retail investors, noting that "retailer investors are pouring money into tech giant Apple Inc. than ever before."
The report cited consumer-oriented brokerage firm TD Ameritrade as saying that "more of its clients own Apple shares now than at any other point," making Apple shares the second most widely held stock by its clients after General Electric in share count, and by far the most widely held in terms of dollar value.
While this has triggered reports vilifying Apple for "avoiding" taxes, the company is actually "one of the top corporate income tax payers in the country, if not the largest," notes Steve Dowling, Apple's head of public relations.
In 2012, Apple paid $6 billion in federal corporate income taxes, which amounts to 1 out of every 40 dollars in corporate income taxes collected by the U.S. government Dowling told Bloomberg last year.
Apple continues to earn new cash faster than it is paying out in dividends and stock buybacks; even with its $10 billion in quarterly dividend payments over the past year and $10s of billions in buybacks, Apple's cash hoard has grown to more than $158.8 billion by the end of 2013. Apple will continue paying its quarterly dividends about a month and a half after the end of each subsequent quarter, and reevaluate its dividend payments on an annual basis.
Apple's $2.6 billion quarterly dividend payment makes it one of the highest dividend payers in the world.
Source: Apple
According to the last figures reported by YCharts.com, Apple had 891.99 million outstanding shares in mid January. However, since reporting record earnings in late January, Apple's chief executive Tim Cook announced the company had taken advantage of short term trading panic to buy back $14 billion worth of its own stock.
Following earnings reports, Apple stock tumbled from $550 to slightly below $500 for one week. At those prices, Apple's $14 billion could have bought up an additional 28 million shares, bringing Apple's outstanding share count down toward 860 million shares. Apple shares have since recovered to $544.
After buying back shares, Apple doesn't need to pay dividends for them any more, meaning the most recent buyback trimmed around $85.4 million off the total cost of its total quarterly dividend payment. For the remaining roughly 860 million shares, Apple paid shareholders "of record" by the ex-dividend date last week a $3.05 dividend per share, totaling around $2.6 billion.
Flush with billions in cash it simply can't spend fast enough, Apple first announced plans for a dividend program nearly two years ago in March, alongside a $10 billion share buyback program. It was the first time the company had paid a dividend in 17 years. Each quarter, the company initially stated it would pay its shareholders a $2.65 per share dividend.
In an earnings conference call last year, the company's chief executive Tim Cook announced that, after paying out more than $10 billion over the previous year in dividends, the company would launch "an aggressive plan that more than doubles the size of the [existing] capital return program."
Cook said "the vast majority of our incremental cash return will be in the form of share repurchases," explaining that "as the Board and management team deliberated among the various alternatives to returning cash, we concluded that investing in Apple was the best. In addition to share repurchases, we are increasing our current dividend by 15% to further appeal to investors seeking yield."
He added, "while we continue to generate cash in excess of our needs to operate the business, invest in our future and maintain flexibility to take advantage of strategic opportunities, we remain firmly committed to our objective of delivering attractive returns to shareholders through both our business performance and the return of capital."
A report by the Dividend Daily stated that Apple's dividend program has attracted new retail investors, noting that "retailer investors are pouring money into tech giant Apple Inc. than ever before."
The report cited consumer-oriented brokerage firm TD Ameritrade as saying that "more of its clients own Apple shares now than at any other point," making Apple shares the second most widely held stock by its clients after General Electric in share count, and by far the most widely held in terms of dollar value.
Can't spend fast enough to make a dent
Cook outlined that Apple's newly expanded buyback and dividend plans would distribute $100 billion from its cash pile, leveraging debt markets to borrow at very low interest against the company's vast holdings that are mostly held overseas. That strategy allowed the company to make use of its stellar credit rating and avoid massive taxes that would be triggered if it were to simply shift cash earned internationally into the U.S.While this has triggered reports vilifying Apple for "avoiding" taxes, the company is actually "one of the top corporate income tax payers in the country, if not the largest," notes Steve Dowling, Apple's head of public relations.
In 2012, Apple paid $6 billion in federal corporate income taxes, which amounts to 1 out of every 40 dollars in corporate income taxes collected by the U.S. government Dowling told Bloomberg last year.
In 2012, "Apple paid $6B in federal corporate income taxes: 1/40th of all corporate income taxes collected by the US" bloomberg.com/news/2013-05-0...
-- Daniel Eran Dilger (@DanielEran)
Apple continues to earn new cash faster than it is paying out in dividends and stock buybacks; even with its $10 billion in quarterly dividend payments over the past year and $10s of billions in buybacks, Apple's cash hoard has grown to more than $158.8 billion by the end of 2013. Apple will continue paying its quarterly dividends about a month and a half after the end of each subsequent quarter, and reevaluate its dividend payments on an annual basis.
Apple's $2.6 billion quarterly dividend payment makes it one of the highest dividend payers in the world.
Comments
Just reinvest your dividends...even better.
Apple, actually pay their Tax. And What about the company that do no evil?
Why does the US deserve a cut? The overseas money is from foreign people buying things made by other foreign people on foreign soil.
The only other country with a tax like this is Estonia, the US just needs to stop trying to tax foreign profits.
Why does the US deserve a cut? The overseas money is from foreign people buying things made by other foreign people on foreign soil.
The only other country with a tax like this is Estonia, the US just needs to stop trying to tax foreign profits.
How about the US dismantle the very expensive foreign infrastructure that allows companies like Apple to make tons of money overseas? The US advancing its trade policies to the benefit of US companies and enforcing them is very expensive. Companies like Apple are the primary beneficiaries of these costly policies, and it is reasonable to ask them to pay a tax when moving foreign money back home. Moreover, it was the passing of legislation like NAFTA that allowed US companies to move operations overseas by doing away with an import tax that was in place since the founding of this country.
People act like import taxes and the taxation of foreign profit is a new concept. They, however, have been around since the beginning of our Country. Since we have started fiddling with these policies the US has experienced a significant economic downturn.
How about the US dismantle the very expensive foreign infrastructure that allows companies like Apple to make tons of money overseas?
Sounds like a great idea, and we should withdraw all our troops from Europe also.
All Apple needs to do is move its headquarters offshore, trade all its public shares for ADRs, and make "Apple US" a subsidiary of "Apple World". The current US tax policy will end up causing most companies to do stuff like this eventually.
They could just as easily be a foreign country with an U.S. subsidiary. How does the U.S. help them overseas?
Frankly, I don't see how corporate taxes do much good. They just raise the costs for the business and get passed along to the consumers in some form or another.
Frankly, I don't see how corporate taxes do much good. They just raise the costs for the business and get passed along to the consumers in some form or another.
Domestic corporate taxes are the basis for our lack (-ish) of corruption in income taxes. What happens is that corporations need deductions, so that they have to accurately report all of the wages that they pay out (since otherwise they would have to pay tax on that wage money paid out). Because of corporate taxes, the government gets accurate data on W-2s, and there is almost no income tax fraud. Similarly, companies have to report the money that they pay to other corporations, the whole anti-corruption system is based on domestic corporate taxes existing, and to limit double taxing they lower the tax on dividends.
There is no corresponding benefit to corporate taxes on foreign profits.
Apple paid $6b, they reported that they allocated $13b (26% rate) for 2013. This gives them a 12% rate when the expected rate is 35%. Outside of the US, it's low single digits.
Google made a provision for $3.8b on income of $24.2b = 15.7% provision and they may not have paid that fully.
Isn't that better than the buyback that you only see the benefit of when you sell your shares and might not see at all if the value drops? At least you are getting money to spend that you can choose what to do with without decreasing your investment.
They are a tax on profit. If Apple increased prices to counter income tax, they'd make more profit and be due more income tax so no, they don't get passed onto consumers.
They could just as easily be a foreign country with an U.S. subsidiary. How does the U.S. help them overseas?
Frankly, I don't see how corporate taxes do much good. They just raise the costs for the business and get passed along to the consumers in some form or another.
That would be fine, except that in order not to increase the deficit (any more than it's already being increased), the taxes on individuals (and/or the fees collected from other sources of revenue) would have to be increased by the roughly $250 billion annually lost through elimination of the tax on corporate profits.
And corporations would have no incentive to cut prices on products or services by that or any other amount. This move would simply increase their profits. It would be great for the stock market. And I believe it would be good for overall domestic economic growth. But since that growth, especially that going to corporate profits, would be largely "tax free", the only benefit would be from the increase in income (and taxes) coming from individuals. So I'm not sure how individuals would feel about having their taxes increased, while/because corporations had theirs eliminated.
How about the US dismantle the very expensive foreign infrastructure that allows companies like Apple to make tons of money overseas? The US advancing its trade policies to the benefit of US companies and enforcing them is very expensive. Companies like Apple are the primary beneficiaries of these costly policies, and it is reasonable to ask them to pay a tax when moving foreign money back home. Moreover, it was the passing of legislation like NAFTA that allowed US companies to move operations overseas by doing away with an import tax that was in place since the founding of this country.
People act like import taxes and the taxation of foreign profit is a new concept. They, however, have been around since the beginning of our Country. Since we have started fiddling with these policies the US has experienced a significant economic downturn.
Corporate taxes were not introduced in the US until 1913.
How does the U.S. help them overseas?
I wish the US would help them in the US....
3.05 = 0.59% = bad div return
At least its higher than Google of 0% but less than MSFT of 0.79%
3.05 = 0.59% = bad div return
At least its higher than Google of 0% but less than MSFT of 0.79%
That's silly.
The S&P 500 has an annualized dividend yield of 1.92%. The NASDAQ 100 (to which Apple belongs), 0.99%. Apple's yield (2.3%) is higher than either.
You see free money, I was right