On the people who complain about low dividends ... it's easy or you sell 2-5% / year of your shares or even better write call's on your shares, no dividend will every beat that return ...you can make easily 5% a month and if you get called away then you write puts to get back in ... A year ago the dividend was "OK", let's see what they do in february ... though I'm in the camp of buy backs or even better stop returning cash till the market goes in reverse ... it will, probably not this year, but surely next.
Apple's dividends are not high enough to be a valid source of income. I tend to view them as a bonus and reinvest them in AAPL. Since my stock is in a 401K account I don't pay fees or taxes (yet). Growing my holding 1-2% a year in addition to the long term stock growth is great. Since dividends have started again, I have added about 10% more shares which I cannot complain about. When I retire I will probably move the stock into something more stable and that provides a decent income. Until then I will ride the helter-skelter that is APPL.
Of all the problems that analysts invent for Apple, the most challenging thing the company faces is actually how to responsibly spend all of the money it is generating from leading the development of the world's consumer technology.
... I suspect this makes the board meetings at quite tense...
From a business standpoint there is no difference between a company, any company, giving money away to stockholders or giving it away to charity. It is assets sucked out of the company and diminishing its ability to invest in itself. Basically, its akin to private equity coming in, sucking a company dry and then leaving it to its fate. They care nothing about the company and its business, only about their own wealth.
That is not how America was built. But it is how America will die -- or at least play second fiddle to countries and companies who act more responsibly.
From a business standpoint there is no difference between a company, any company, giving money away to stockholders or giving it away to charity. It is assets sucked out of the company and diminishing its ability to invest in itself. Basically, its akin to private equity coming in, sucking a company dry and then leaving it to its fate. They care nothing about the company and its business, only about their own wealth.
That is not how America was built. But it is how America will die -- or at least play second fiddle to countries and companies who act more responsibly.
You got me confused here. Apple is NOT being sucked dry—research investment continues to increase every quarter. They are awash in cash. If they did NOT return some of that cash to investors, they would be acting irresponsibly.
In any case, here is no way they could use that much cash wisely to grow their current businesses. They would have to buy out hundreds of other companies or expand from scratch into dozens of new markets. I have no interest in Apple losing focus like that. Furthermore, they would likely become a huge target for government breakup if they expanded into every sector they could think of.
While I'm not complaining about the share gains I have received from Apple since 2004, I'd just like to point out that Apple's dividends are only 1% and that seems rather low from a company always talking about cash neutrality. Even Microsoft is giving out higher dividends than Apple and has to give out about 3B more shares worth than Apple every quarter. If buying back shares are really helping shareholders, then that's fine but you look at Boeing and although it's struggling, that company gives out far higher dividends than cash-flow king Apple. I would think Apple could afford to give out a $1 a share in dividends than just $0.77. That would keep me flush every quarter as a senior citizen without having to touch my social security check
If Apple doesn't want to give out a higher dividend then why don't they acquire a cloud computing business since Wall Street claims the CLOUD has unlimited growth potential and they endlessly praise every company that has a cloud service such as Alphabet, Microsoft, and Amazon. Those companies get such fat P/Es based on their cloud services while Apple only gets criticism about falling iPhone sales.
To be fair, the current dividend of $3.08 per share was issued when AAPL was closer to $200 a share in March of 2019. Which translates to about 1.5%. Which is not great but also not bad at all.
If you were to look at AAPL 5 past dividend payout at the the time they announced the increase in dividend, during the 2nd quarter report after March, the payout was
2015 $2.08 with AAPL at about $124/share and 1.7%
2016 $2.28 with AAPL at about $108/share and 2.4%
2017 $2.52 with AAPL at about $143/share and 1.6%
2018 $2.92 with AAPL at about $167/share and 1.5%
2019 $3.08 with AAPL at about $190/share and 1.6%
It is only now with AAPL over $300 a share, that the 2019 dividend payout has dropped to 1%.
But Apple only raises its dividend once a year, during the 2nd quarter earnings report. So we will have to wait until after March to see how much Apple will increase the dividend by. If Apple were to keep their average of about 1.6% and AAPL were to remain above $300 a share, then the dividend should increase to about $4.50 a share after this March. AAPL share price has risen more than 50%, since the last increase in March of 2019 and hopefully the dividend payout will do the same, to maintain a 1.5% dividend at the time of increase.
And hopefully, by March of 2021, the newly 2020 increased dividend to keep it at 1.5%, will once again be less than 1% of AAPL new share price.
The issue/challenge is that the cash flow of the company has not really gone up, even with the increase in the stock price. The payout has been pretty consistent at ~ 20% of cash flow. Increasing it by 50% (30% of cash flow) just to keep the dividend yield same as the past starts putting Apple in a corner with less future flexibility.
Plus, that money would have been used to buy back shares. Once the share count gets below 3B shares, (its 4.3 billion now) the amount of flexibility on the dividend becomes enormous
Surely you have to know Daniel, that these outlets are not just "wrong", they are liars. All too often news media is forgiven for being "wrong" when really, they are liars.
From a business standpoint there is no difference between a company, any company, giving money away to stockholders or giving it away to charity. It is assets sucked out of the company and diminishing its ability to invest in itself. Basically, its akin to private equity coming in, sucking a company dry and then leaving it to its fate. They care nothing about the company and its business, only about their own wealth.
That is not how America was built. But it is how America will die -- or at least play second fiddle to countries and companies who act more responsibly.
You got me confused here. Apple is NOT being sucked dry—research investment continues to increase every quarter. They are awash in cash. If they did NOT return some of that cash to investors, they would be acting irresponsibly.
In any case, here is no way they could use that much cash wisely to grow their current businesses. They would have to buy out hundreds of other companies or expand from scratch into dozens of new markets. I have no interest in Apple losing focus like that. Furthermore, they would likely become a huge target for government breakup if they expanded into every sector they could think of.
You want that, invest in Samsung...
That all sounds good -- except, the real reason is: A number of years ago a few activist investors who don't give a damn about the business got involved and forced Apple to start giving away their assets to them. They saw a cash cow and decided to milk it. And they did.
From a business standpoint there is no difference between a company, any company, giving money away to stockholders or giving it away to charity. It is assets sucked out of the company and diminishing its ability to invest in itself. Basically, its akin to private equity coming in, sucking a company dry and then leaving it to its fate. They care nothing about the company and its business, only about their own wealth.
That is not how America was built. But it is how America will die -- or at least play second fiddle to countries and companies who act more responsibly.
You got me confused here. Apple is NOT being sucked dry—research investment continues to increase every quarter. They are awash in cash. If they did NOT return some of that cash to investors, they would be acting irresponsibly.
In any case, here is no way they could use that much cash wisely to grow their current businesses. They would have to buy out hundreds of other companies or expand from scratch into dozens of new markets. I have no interest in Apple losing focus like that. Furthermore, they would likely become a huge target for government breakup if they expanded into every sector they could think of.
You want that, invest in Samsung...
That all sounds good -- except, the real reason is: A number of years ago a few activist investors who don't give a damn about the business got involved and forced Apple to start giving away their assets to them. They saw a cash cow and decided to milk it. And they did.
It is a fair point that the industry pressured Apple to begin stock buybacks. However, unless Apple had done that the amount of cash on hand would have increased close to $500BB. That makes no sense and Apple cannot go and spend that money on acquisitions without having serious risk. The only criticism I have is that Apple's dividend could be higher. Doubling dividends with a total annual outlay of $7M would be reasonable.
From a business standpoint there is no difference between a company, any company, giving money away to stockholders or giving it away to charity. It is assets sucked out of the company and diminishing its ability to invest in itself. Basically, its akin to private equity coming in, sucking a company dry and then leaving it to its fate. They care nothing about the company and its business, only about their own wealth.
That is not how America was built. But it is how America will die -- or at least play second fiddle to countries and companies who act more responsibly.
You got me confused here. Apple is NOT being sucked dry—research investment continues to increase every quarter. They are awash in cash. If they did NOT return some of that cash to investors, they would be acting irresponsibly.
In any case, here is no way they could use that much cash wisely to grow their current businesses. They would have to buy out hundreds of other companies or expand from scratch into dozens of new markets. I have no interest in Apple losing focus like that. Furthermore, they would likely become a huge target for government breakup if they expanded into every sector they could think of.
You want that, invest in Samsung...
That all sounds good -- except, the real reason is: A number of years ago a few activist investors who don't give a damn about the business got involved and forced Apple to start giving away their assets to them. They saw a cash cow and decided to milk it. And they did.
It is a fair point that the industry pressured Apple to begin stock buybacks. However, unless Apple had done that the amount of cash on hand would have increased close to $500BB. That makes no sense and Apple cannot go and spend that money on acquisitions without having serious risk. The only criticism I have is that Apple's dividend could be higher. Doubling dividends with a total annual outlay of $7M would be reasonable.
"The industry" (Whatever that is) cannot pressure Apple or any company into deciding what they will do with their assets. Rather, it was Carl Icahn -- a notorious activist investor who invests his way into a company and then uses his position to pressure them into doing things that benefit him financially.
But, you still haven't explained why giving money away benefits the company. If it does, then perhaps they should start giving me some.
- As Apple have more than 4B shares, it would never be a in position to pay a dividend that materially compared to the earning potential of selling a single share. Still, distributing ~$3.5B as a dividend isn't bad for a company that is constantly reinvesting and growing. (Usually such companies don't pay any dividends.) - Apple's cash horde is mostly irrelevant because while it is a big number, it's small in comparison to their planned expenditure (e.g. In the US alone they've committed 40% more than the total cash horde just in contributions.)
Can someone help me understand why Apple continues to perform accelerated share repurchases from large institutions at significant premium to market prices (30%+) rather than just exclusively purchasing shares on the open market? I had always assumed it was because such massive open market buying would bid up market prices to about that same level, but as this article states, they were able to buy 40 million shares on the open market for $10 billion, versus only 30 million shares via ASRs for the same price. Not only are they rewarding the firms with enough power to pump and dump the stock, but they’re basically losing money by overpaying for those shares. What gives? Serious question.
Corporate types look after fellow corporates. It means they get nice things said about them at dinner parties made up of the right kind of people.
Of all the problems that analysts invent for Apple, the most challenging thing the company faces is actually how to responsibly spend all of the money it is generating from leading the development of the world's consumer technology.
... I suspect this makes the board meetings at quite tense...
I can see it now:
"Let's buy an island!" "**** it, let's buy two!" "No, no, we should buy a DisneyLand!" "Forget DisneyLand, let's buy Disney!"
Apple could invest some of it’s massive profits to its customers in the form of cheaper prices or cheaper repairs.
At least they would get something in return: More customers and less competition. The way they're doing it they may as well just donate it to charity. Carnegie at least built libraries and music & lecture halls.
All I can say is Apple has a nice very problem to have!
I also agree, investment in the cloud is desperately needed. iCloud is no Box or DropBox product. I can't really compare it to OneDrive either but that is where Apple needs to invest plus making their Cloud service better value for their loyal customers. Un-techie people with iPhones just don't get their cloud solution and the 5GB per user is woefully inadequate in today's cloud world.
try to achieve cash neutral as Tim apple want is not easy. Buy back could be the least impact in the event of market downturn or surge. Special dividend could mess up someone's tax badly. increase dividend is a long term commitment, with political and geographic risk (not mention techological risk, such as 5G roll out), too hard to commit cash for the future. etc. etc. At current uncertainty of quarter to quarter event - without steady subscription income (even with Apple TV subscription, the royalty of screamer is hard to predict). IMHO. Buy back is the best option.
You got me confused here. Apple is NOT being sucked dry—research investment continues to increase every quarter. They are awash in cash. If they did NOT return some of that cash to investors, they would be acting irresponsibly.
In any case, here is no way they could use that much cash wisely to grow their current businesses. They would have to buy out hundreds of other companies or expand from scratch into dozens of new markets. I have no interest in Apple losing focus like that. Furthermore, they would likely become a huge target for government breakup if they expanded into every sector they could think of.
You want that, invest in Samsung...
That's a great analogy, two-fold, especially the part about buy some other company or "buy" themselves. One way to look at this tho, is, it's like paying off your credit cards. All of the stock people "own" of your company is how much they loaned you, or Apple, in this case. So, like I said, it's similar to credit card debt if you need to relate to something...
I always keep thinking, what if they could buy ALL the stocks back and go private, i.e. have no debt, but for a company this large who knows, probably impossible. The only thing I wonder is WHO would own Apple, if there were no stocks? Just CEO and on down the line... IDK how that works, the fine print of reversing being PUBLIC, but be interesting to think about...
Comments
A year ago the dividend was "OK", let's see what they do in february ... though I'm in the camp of buy backs or even better stop returning cash till the market goes in reverse ... it will, probably not this year, but surely next.
When I retire I will probably move the stock into something more stable and that provides a decent income. Until then I will ride the helter-skelter that is APPL.
Plus, that money would have been used to buy back shares. Once the share count gets below 3B shares, (its 4.3 billion now) the amount of flexibility on the dividend becomes enormous
That all sounds good -- except, the real reason is: A number of years ago a few activist investors who don't give a damn about the business got involved and forced Apple to start giving away their assets to them. They saw a cash cow and decided to milk it. And they did.
The only criticism I have is that Apple's dividend could be higher. Doubling dividends with a total annual outlay of $7M would be reasonable.
- Apple's cash horde is mostly irrelevant because while it is a big number, it's small in comparison to their planned expenditure (e.g. In the US alone they've committed 40% more than the total cash horde just in contributions.)
"Let's buy an island!"
"**** it, let's buy two!"
"No, no, we should buy a DisneyLand!"
"Forget DisneyLand, let's buy Disney!"
LOL
At least they would get something in return: More customers and less competition.
The way they're doing it they may as well just donate it to charity. Carnegie at least built libraries and music & lecture halls.
Why did Apple buy up another $20B in stock at record highs?
That's easy. They're doomed!
I always keep thinking, what if they could buy ALL the stocks back and go private, i.e. have no debt, but for a company this large who knows, probably impossible. The only thing I wonder is WHO would own Apple, if there were no stocks? Just CEO and on down the line... IDK how that works, the fine print of reversing being PUBLIC, but be interesting to think about...
That's silly tho huh? haha