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

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  • Reply 102 of 182
    shardshard Posts: 96member
    Quote:
    Originally Posted by Dick Applebaum View Post


    That's a far cry from the people who were insisting that if Apple did a dividend that the share price would jump by 15% or so.



    The market is often delayed by a day or two, the analysts, investment consultants and others need a day to digest what is going on, they then advice their funds/investors etc on what they think and they in turn take another day to make a move.



    Believe or not, this forum is at the front lines.[/QUOTE]



    Yeah... About 650 K shares traded at open, then dropped down to less than 100 K where it stays.



    This is the best target I've seen:[/QUOTE]



    I think you missed the one by Morgan Stanley about 5 days ago where they called for a bull case estimate of $960.
  • Reply 103 of 182
    As a consumer fueling their huge cash reserves through higher than average profit margins, I'd much rather have seen Apple commit to making massive investments in research in new technologies. The only thing these dividend payments are doing is channeling more cash into the banking class which contributes nothing to society nor does it improve Apple products or technology in general. It didn't take very long for the money counters to reverse the legacy of innovation left behind by Steve Jobs.
  • Reply 104 of 182
    backtomacbacktomac Posts: 4,579member
    Quote:
    Originally Posted by CGJ View Post


    Buyback is good, gives shares to hard-working employees who grow the business.



    Dividend's are bad, gives rich 'investors' even more money; even though they don't contribute at all to the way Apple is run. It's like a sportsman paying the owner of the sports club, as opposed to the owner paying the sportsman.



    Surely, going from $370 in October 2011 to $590 in March 2012 is enough money for these 'investors'. Dividends are for companies with no room for growth, like Microsoft.



    Just because you have money, doesn't mean you have to spend money.



    This is a retarded post.



    Dividends don't reward just the rich investors. They reward all the investors. And the ones who'll be rewarded the most will be the long term investors who bought shares a long time ago. If you bought Apple at $80/share, your dividend yield is over 10%. That's pretty damn good when 10 year Treasuries are only yielding around 2.5%.



    I believe one consequence of the dividend will be that there will be less volatility in Apple. I think it will be very difficult for hedge funds to manipulate the stock because dividend buyers will just come in and buy in volume when the stock price drops. Decreased volatility will also diminish the options trading in the stock as well I would think.
  • Reply 105 of 182
    Quote:
    Originally Posted by backtomac View Post


    And the ones who'll be rewarded the most will be the long term investors who bought shares a long time ago. If you bought Apple at $80/share, your dividend yield is over 10%. That's pretty damn good when 10 year Treasuries are only yielding around 2.5%.



    You are double-counting your returns. The reason that the dividend yield - say, 2.5% - is so low is precisely because the capital gains is so high (i.e., (595 – 80)/80 – 1 = ~550%).



    You can't, in your calculations, say that you got a 550% return over your holding period plus a 10% dividend. Your dividend yield is based on the current price. Period.



    Your math does not make any sense.
  • Reply 106 of 182
    Quote:
    Originally Posted by Dick Applebaum View Post


    It's a joke...



    I've never been there (closest we got was Rome), but the Dalmatian Coast is supposed to be one of the most beautiful places in the world -- and Dubrovnik is the jewel in the crown.



    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! \



    Thought so. And sorry to hear that you lost a wonderful wife.



    If ever you visit europe again you do have to go to croatia. What you said about the Dalmatian Coast and Dubrovnik. It's absolutely true. And the color and clarity of the water is just spectacular.
  • Reply 107 of 182
    melgrossmelgross Posts: 33,285member
    Quote:
    Originally Posted by anantksundaram View Post


    Of course it's more complex. Neither of us is a tax expert. But passive income is fairly trivial for US companies (unlike EU and Asian companies that have considerable cross-holdings).







    Tech companies often pay substantially less as an "effective" rate (typically, about 25% for companies such as Apple, Intel, Cisco, HP) because Congress gave them a tax credit on employee options exercised during the year (which get treated, for tax purposes, like money finally left the company to compensate the employee). That has nothing to do with the rate at which repatriated income is taxed.



    That last part is what I just said, so we are in agreement for a change.
  • Reply 108 of 182
    melgrossmelgross Posts: 33,285member
    Quote:
    Originally Posted by anantksundaram View Post


    You are double-counting your returns. The reason that the dividend yield - say, 2.5% - is so low is precisely because the capital gains is so high (i.e., (595 ? 80)/80 ? 1 = ~550%).



    You can't, in your calculations, say that you got a 550% return over your holding period plus a 10% dividend. Your dividend yield is based on the current price. Period.



    Your math does not make any sense.



    I understand the point he's making though. He made an $80 investment, and now, in addition to the price accumulation, he's getting a dividend that's actually more than a 10% return on that $80.



    Inflation and the years that there was no dividend must be factored in, but this is something unexpected, so it's an addition.
  • Reply 109 of 182
    justflybobjustflybob Posts: 1,337member
    Quote:
    Originally Posted by Dick Applebaum View Post


    One of the reasons I wanted a large split was to setup investment accounts for my grandkids... at $600 a pop there wouldn't be much room for action...



    They each have saving accounts -- but that's just a lay-away for future needs (car, insurance, etc.).



    My Dad had shares of Southern Cal Edison that offered dividend reinvestment at a fixed grant price for a period of time... He was able to accumulate shares at a fraction of their price in an up market...



    That could be a great deal for AAPL investors!




    I have to agree with you on this one.

    I believe a stock split would do more for Apple in the long run But it is hard to go against a buy-back when they are sitting on so much cash. One of the reasons that may not have chosen that course is an attempt to provide greater pricing stability, but I am quite sure that others here would profess just the opposite strategy to do so.

    I am not so sure about offering a dividend at this point. It seems to be a concession to the die hards on wall street, although a DRIP (Dividend Re Investment Plan, for those that may not know) can be a very positive way to grow a position or a portfolio.



    On a more personal note, I offer you and all members of this board an apology for my comments surrounding Walmart in another thread. I was over the line, and although there is quite a back-story to my displeasure with them, this is not the appropriate format.



    Dick, I consider you a calming and rational voice on this forum, and I hope it you continue to be that voice.
  • Reply 110 of 182
    melgrossmelgross Posts: 33,285member
    http://www.thestreet.com/story/11461...m_ven=CNNMONEY



    Up about $13 as of this posting, and was up about $14 a short while before. It's pretty volatile still, but so far is trending upwards.
  • Reply 111 of 182
    melgrossmelgross Posts: 33,285member
    Quote:
    Originally Posted by justflybob View Post


    I have to agree with you on this one.

    I believe a stock split would do more for Apple in the long run But it is hard to go against a buy-back when they are sitting on so much cash. One of the reasons that may not have chosen that course is an attempt to provide greater pricing stability, but I am quite sure that others here would profess just the opposite strategy to do so.

    I am not so sure about offering a dividend at this point. It seems to be a concession to the die hards on wall street, although a DRIP (Dividend Re Investment Plan, for those that may not know) can be a very positive way to grow a position or a portfolio.



    On a more personal note, I offer you and all members of this board an apology for my comments surrounding Walmart in another thread. I was over the line, and although there is quite a back-story to my displeasure with them, this is not the appropriate format.



    Dick, I consider you a calming and rational voice on this forum, and I hope it you continue to be that voice.



    Stock splits do little. It's an illusion. Most of Apple's stock is held by institutions who can not one whit about the share price. Most of the rest is held by large individual investors who don't care either. With the dividend, more will be bought by institutions, but now by the ones that can only, by charter, by instruments that throw off dividends. So, Apple's stock will be held by even more institutions.



    It's held by institutions to the tune of about 72%. The average is 77%. So now, Apple's stock will move closer to that larger percentage over the next few months.



    The buyback isn't for the usual reasons. It's intended to keep the number of shares stable.
  • Reply 112 of 182
    godzillagodzilla Posts: 156member
    Quote:
    Originally Posted by bwik View Post


    A buyback at $600 a share for AAPL would be totally asinine. The buyback, if ever, should have occurred 4-5 years ago. The power of it would have been multiplied. To do it now is pathetic.



    I don't think Apple is trying to get a bargain on AAPL. They believe in the company, feel that it will go up, and true to form, think and act carefully and wisely, rather than just Buy one day when the price dips. It shows confidence in the future prospects of the company.



    Quote:
    Originally Posted by KDMeister View Post


    I would rather see Apple stick to their guns despite all the pressure from the investor community. I'd rather see Apple shares go up because of organic growth and not because of dividends. Buybacks are the biggest waste of money - the money will go into thin air when the stock price comes down at some point. I'd rather see Apple end world hunger than pay people who already have a lot of cash to spare. After all they have money to spend on Apple products and Apple shares.



    Apple has no responsibility to end world hunger or any of the other social responsibility crap that vultures throw at them because they're rich. Social responsibility is of UTMOST importance, but a company is here to make money. If anything, go knocking on the rich Executive's doors about donations, leave the business alone, as its job is to generate revenue for owners.



    Quote:
    Originally Posted by melgross View Post


    The problem with share repurchasing is that it throws money away. It's GONE! Nothing can be done with it. And for most companies doing it, it doesn't result in share price accumulation over the long term..



    .... Unless of course they sell the shares back when the stock price goes higher.



    Quote:
    Originally Posted by Shaun, UK View Post


    I wasn't trying to be cynical. I didn't realise stock yields were that low in general. I always thought people owned stocks for the dividends rather than the share price.



    I could care less about Dividends. They're simply a perk to me. So sure, as an Investor, I'm happy. I care about share price appreciation. That's what dictates a truly good company, truly great company performance, and that's where you make real money.



    Quote:
    Originally Posted by jragosta View Post


    That's a far cry from the people who were insisting that if Apple did a dividend that the share price would jump by 15% or so.



    Give it time. AAPL doesn't usually respond so dramatically to good news initially. Remember earnings? A measly $25 jump that day, yet a continuous upward correction into the $600's and beyond.



    P.S: I've been watching the price movement for $30 minutes, and it is sitting there in the $599's, like a tug of war between low $599's and $600's! It touched $600 and it creeping there again. I want to see it get in there!
  • Reply 113 of 182
    [greg][greg] Posts: 78member
    I don't understand the argument that Apple must be doing this because they feel their growth will slow soon. Apple has been growing by leaps and bounds, while reinvesting lots of their cash in product development, small intelligent acquisitions, supplier concessions, distribution deals, etc. Despite all the investments they've needed to make to grow by huge percentages each year, they continue to grow cash on hand by exponential amounts. If they continued to invest and grow at the rate they have over the last decade, they would have no problem paying a dividend with a yield of 1.8%, and it wouldn't slow their growth.



    My take is this; for years, Apple has been growing so fast they couldn't reinvest their cash quickly enough. They are still growing that fast, and expect to continue growing that fast. $100 billion is apparently the (insanely huge) cushion Apple needed to feel comfortable paying out the growth in cash, rather than adding it to the more-than-ample pile.
  • Reply 114 of 182
    melgrossmelgross Posts: 33,285member
    Quote:
    Originally Posted by Godzilla View Post








    .... Unless of course they sell the shares back when the stock price goes higher.








    Generally the shares are destroyed, along with their value. They won't exist to be re-released. If Apple wants more shares, they have to issue them.
  • Reply 115 of 182
    charlitunacharlituna Posts: 7,217member
    Quote:
    Originally Posted by CogitoDexter View Post


    By the looks of it, that will barely dent the cash pile, if future profits are taken into consideration!



    Yep. and they probably spent several months considering that issue, plus the legal issues and concerns before going forward on this.



    And yet there will be folks that will talk of this as a Tim Cook decision, making it sound like he decided to do it the moment Steve was buried now that Steve wasn't around to say no. Because they don't understand the amount of back work that has to go into such things, same for things like charity match programs, new cash discounts for employees and so on.
  • Reply 116 of 182
    Quote:
    Originally Posted by melgross View Post


    I understand the point he's making though. He made an $80 investment, and now, in addition to the price accumulation, he's getting a dividend that's actually more than a 10% return on that $80.



    We are back to disagreeing: I don't agree with your math here!



    But I'll stop there.
  • Reply 117 of 182
    charlitunacharlituna Posts: 7,217member
    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.





    Depends on the acquisition.
  • Reply 118 of 182
    Quote:
    Originally Posted by melgross View Post


    Generally the shares are destroyed, along with their value. They won't exist to be re-released. If Apple wants more shares, they have to issue them.



    Actually, it's not true that they are destroyed. They can be kept as treasury stock. While they will not have voting rights or receive dividends, they can be reissued, kept forever, or simply canceled. While it's kept, it appears as "negative" equity on the balance sheet. It counts as "authorized" but not issued shares.
  • Reply 119 of 182
    Quote:
    Originally Posted by charlituna View Post


    Depends on the acquisition.



    Can you name a couple of large ones that have worked out well? For every one of those, I could name five that have not.
  • Reply 120 of 182
    charlitunacharlituna Posts: 7,217member
    Quote:
    Originally Posted by Woodlink View Post


    Yes, Congress has approved corporate tax holidays in the past.



    Problem is, every time Congress has done such, corporations just park even more money off shore hoping for another such holiday.



    so Congress just needs to find a way to make sure the money stays here in the US. Either put a time requirement on the break, tie it to some kind of 'physical' item like a tax break on the money because they are using it to built a new data center with a minimum of X jobs created, or to start assembly factories in the US, or even a scholarship fund for students that want to get into engineering etc, or a grant program for schools that want to adopt iPads but it's a bit out of reach funding wise. I'm sure there's a way in the various rules they can set up such a game in a way that is legal and Apple etc would bite and bring some of that money home
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