There is no direct correlation between a high dividend and stock price. Some people advise to beware a stock which offers an unusually high dividend as the company may be dangerously close to insolvency.
Personally, I'd prefer both the dividend and the buybacks were ended and the money be used to leapfrog their competitors instead.
I would be surprised that if a solid blue chip stock like AAPL paid a dividend that exceeded that of any other low-risk investment (e.g. >4-5%), it's share price wouldn't rise as everyone would want to buy and hold it, especially large institutional investors and thus raise the share price.
If the rate was higher (like 10%), I would think it would be a slam dunk.
But I'm open to hearing why this may not be the case and point out flaws in my logic. . .
There is no direct correlation between a high dividend and stock price. Some people advise to beware a stock which offers an unusually high dividend as the company may be dangerously close to insolvency.
Personally, I'd prefer both the dividend and the buybacks were ended and the money be used to leapfrog their competitors instead.
It's a bit difficult to leapfrog your competitors when you're already ahead. Unless you mean they need to go backwards!????
Dividend on long term stocks is qualify dividend and is taxed at your long term capital gain rate. Dividend on stocks held for less than a year is taxed as ordinary income. Dividend is also taxed the year you received it, regardless if you chose to reinvested your dividend into buying more shares of the stock.
Generally speaking, most regular dividends from U.S. companies with normal company structures (corporations) are qualified.
. . .
However, investors must meet certain requirements to enjoy the reduced tax rate. Investors must adhere to a minimum holding period. For common stock, a share must be held more than 60 days during the 120-day period beginning 60 days before the ex-dividend date.
The above description is a little convoluted, but I guess there's a 120 day window that is 60 days before and 60 days after the ex-dividend date and if you hold the stock for more than 60 days in that window your dividends will be "qualified" and taxed at the long-term capital gains rate.
It's a bit difficult to leapfrog your competitors when you're already ahead. Unless you mean they need to go backwards!????
Ha! No, I mean by skipping a generation of iPhone development. Go straight to the 8th generation (and a side benefit is that 8 is a lucky number in China, as I understand it). It would drive a stake right through the heart of Android.
Apple can't pay a 10% dividend. That would be over $55 billion in dividends a year. Apple generates about $55-$60 billion a year in free cash flows and 60% of that is on foreign soil.
Apple's plan is to buy shares and that will allow them to pay larger dividends in the future. I'd be all for Apple increasing the dividend to 4-5%.
But they are spending $200 billion to buy back shares, presumably from the cash (both domestic and foreign). Why couldn't they have spent the same $200 billion to pay a large dividend. I'm assuming they either wait for repatriation holiday or continue to borrow to fund the dividend.
Thanks DED for the thorough report. Apple needs to keep doing what it does without changing. I want a nominal 2ish% dividend...makes me feel good to make bank CD rates but no more.
I agree with their aggressive stock buyback. If WS doesn't want to own them...they need to buy their own shares just like they are doing.
Wall Street responds with "sell and short AAPL!" Amazon alternates between a slight profit and big losses yet the stock goes up.
Because Amazon (at least in the past years) heavily re-invested almost all profits into expanding its business, and Wall Street seems to prefer it with respect to grow the pile of cash.
That 52 cent dividend just evaporated into thin air.
So sick of this shit. Apple grows revenues 30% this year and only gets a 12 PE, while Google grows a pathetic 13% and gets a 30+ PE.
So why continue to fight what's right in front of your face, constantly complaining about it? Spread your wealth around a little more. You might be happier with your investments. Others are quite happy to sit fast on their Apple stock and enjoy the steady rather than blazing stock price increases. It all depends on why you're investing and in what stocks rather than some other opportunity that's out there. .
So why continue to fight what's right in front of your face, constantly complaining about it? Spread your wealth around a little more. You might be happier with your investments. Others are quite happy to sit fast on their Apple stock and enjoy the steady rather than blazing stock price increases. It all depends on why you're investing and in what stocks rather than some other opportunity that's out there. .
That's your attempt to assign a negative connotation to his statement, and it's very silly. It is normal to look for a number of viable investments for a few reasons. You might be wrong about future performance. You might require liquidity at a time when one of your stocks isn't doing well. A stock may just not be valued the way you anticipate, which can happen in a marketplace that does not enforce a strict pricing formula.
I don't understand why you chose to spin this in a negative manner.
Ironically I'm going to use mine to buy a SurfaceBook, though I'll through in a new iPad Pro to not feel so guilty. I wanted nothing to do with the SurfaceBook until I got to use one, really liked what I saw. The iPad Pro will be used to replace two of my iPad Airs, no longer need them now that I can finally run two apps at once. Though in hind site, it was pretty ridiculous that I had to do this in the first place. I'm still keeping one as I actually need to run three apps, all music creation. Any word on Jail-Break, as I need mouse support.
Comments
There is no direct correlation between a high dividend and stock price. Some people advise to beware a stock which offers an unusually high dividend as the company may be dangerously close to insolvency.
Personally, I'd prefer both the dividend and the buybacks were ended and the money be used to leapfrog their competitors instead.
I would be surprised that if a solid blue chip stock like AAPL paid a dividend that exceeded that of any other low-risk investment (e.g. >4-5%), it's share price wouldn't rise as everyone would want to buy and hold it, especially large institutional investors and thus raise the share price.
If the rate was higher (like 10%), I would think it would be a slam dunk.
But I'm open to hearing why this may not be the case and point out flaws in my logic. . .
Dividend on long term stocks is qualify dividend and is taxed at your long term capital gain rate. Dividend on stocks held for less than a year is taxed as ordinary income. Dividend is also taxed the year you received it, regardless if you chose to reinvested your dividend into buying more shares of the stock.
According to this link on Nasdaq.com (http://www.nasdaq.com/article/qualified-vs-unqualified-dividends-cm184991), the holding period is less than 1 year for qualified dividends.
. . .
The above description is a little convoluted, but I guess there's a 120 day window that is 60 days before and 60 days after the ex-dividend date and if you hold the stock for more than 60 days in that window your dividends will be "qualified" and taxed at the long-term capital gains rate.
Ha! No, I mean by skipping a generation of iPhone development. Go straight to the 8th generation (and a side benefit is that 8 is a lucky number in China, as I understand it). It would drive a stake right through the heart of Android.
Burning $100 billion ... one can only cry.
Apple can't pay a 10% dividend. That would be over $55 billion in dividends a year. Apple generates about $55-$60 billion a year in free cash flows and 60% of that is on foreign soil.
Apple's plan is to buy shares and that will allow them to pay larger dividends in the future. I'd be all for Apple increasing the dividend to 4-5%.
But they are spending $200 billion to buy back shares, presumably from the cash (both domestic and foreign). Why couldn't they have spent the same $200 billion to pay a large dividend. I'm assuming they either wait for repatriation holiday or continue to borrow to fund the dividend.
I agree with their aggressive stock buyback. If WS doesn't want to own them...they need to buy their own shares just like they are doing.
Ha! You're preaching to the converted. Happily, the stock bounced back at the end of the day. It only hurt for a little while.
Because Amazon (at least in the past years) heavily re-invested almost all profits into expanding its business, and Wall Street seems to prefer it with respect to grow the pile of cash.
Hedge your bets, so to speak. Nice, gambling ...
Hedge your bets, so to speak. Nice, gambling ...
That's your attempt to assign a negative connotation to his statement, and it's very silly. It is normal to look for a number of viable investments for a few reasons. You might be wrong about future performance. You might require liquidity at a time when one of your stocks isn't doing well. A stock may just not be valued the way you anticipate, which can happen in a marketplace that does not enforce a strict pricing formula.
I don't understand why you chose to spin this in a negative manner.