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Apple Reportedly Preparing to Announce Larger Dividend or Stock Buyback

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Original poster
Apr 12, 2001
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Quartz reports that Apple is moving closer to announcing a plan to return additional value to shareholders, likely acting "this spring" to either increase its dividend or repurchase additional stock from investors. The move comes amid increased public scrutiny of Apple's plans for its cash as vocal hedge fund manager David Einhorn has been pressing the company to return more money to investors.
Apple's zeroing in on a dividend or buyback was in the works before Einhorn made his complaints public in February, although some of the sources say Apple increased the size of its plan after Einhorn's comments. And although Apple CEO Tim Cook publicly called Einhorn's lawsuit a "silly sideshow," the company found his idea of preferred shares "interesting," sources said. If it decides against a share buyback, Apple could either raise its existing dividend, which the company started paying this year, or issue a special dividend.
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Apple's existing plan announced a year ago involves a quarterly $2.65 per share dividend and a $10 billion stock buyback program intended to offset the issuance of new shares for employee compensation. That plan was projected to cost Apple $45 billion over three years, but the company's cash holdings continue to grow.

aapl_6mo_031213.jpg
Just last week, Warren Buffett suggested that a stock buyback would offer the biggest impact for Apple given the fall in the company's stock price from a high of over $700 last September to $430 today. As long as Apple believes that its stock is undervalued at current prices, Buffett argues that if the company can "buy dollar bills for 80 cents, it's a very good thing to do."

Quartz's report suggests that an announcement regarding additional dividends or stock buybacks could come alongside a product launch, although Apple's plans for any potential product-focused events over the next few months remain murky. Apple would also likely prefer to separate any financial discussions from a product launch, giving full focus to the new products while scheduling a separate conference call focused on investors and analysts to discuss its cash plans as it did when it announced the current program last year.

Article Link: Apple Reportedly Preparing to Announce Larger Dividend or Stock Buyback
 
Article Link
https://www.macrumors.com/2013/03/12/apple-reportedly-preparing-to-announce-larger-dividend-or-stock-buyback/
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samcraig

macrumors P6
Jun 22, 2009
16,779
41,982
USA
I would imagine that any news in this regard would give a boost to the stock. Which wouldn't hurt.
 
Rocketman

Rocketman

macrumors 603
Dec 2, 2001
6,191
1,186
Claremont, The intellectual capitol of the world.
Let's keep this simple. The next AAPL conference call is in late April, about a month away.

The next known product lunch date is WWDC early June.

AAPL should have a policy of a 2-5% annual increase in the dividend. No major impact to cash, but changes the calculus by income buyers.

They should buy back a bunch of stock but do so through Braeburn capital and its offshore holding companies so it is invisible in the shares outstanding figure.

Stealth.

Rocketman
 
P

pixelpro

macrumors member
Jun 17, 2010
48
31
AAPL Please don't give a special dividend. Instead do a stock buyback, and perhaps increase the dividend amount in future payouts !!!
 
TallManNY

TallManNY

macrumors 601
Nov 5, 2007
4,742
1,594
Yelmurc said:
Consequences are always around money.

http://blogs.wsj.com/marketbeat/2013/03/11/apple-spikes-on-what-exactly/?mod=WSJ_qtnews_wsjcomp
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Okay. So haven't there been well respected academic reports that show that technical trading doesn't work. In addition, you know, to the fact that it just sounds crazy (flying wedges and death crosses and the sort). Can there really be enough folks using this voodoo and those folks have enough money that they can actual move a company the size of Apple?
 
J

Judas1

macrumors 6502a
Aug 4, 2011
794
42
Apple stocks were ridiculously overpriced previously. This is the new norm. If I had money to spare, I would buy it at this price and hold. It a good deal and they are not going anywhere soon. But they are no longer a growth company. Nothing they come up with now will be revolutionary. Its the inevitable life cycle of a company.
 
Rocketman

Rocketman

macrumors 603
Dec 2, 2001
6,191
1,186
Claremont, The intellectual capitol of the world.
TallManNY said:
Can there really be enough folks using this voodoo and those folks have enough money that they can actual move a company the size of Apple?
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I made a post well before AAPL hit 700 saying it would hit 445 and possibly 420. Both came to pass and both were based on purely technical trading. Gaps as a primary factor.

Look up my posts on it.

BTW another technical measure says it will go above 700 by the same margin as the ultimate bottom. Let's say the ultimate bottom is 420 and the top was 705. The difference is added to the top to give you 990. It might take 6-12 months to get there. You have dips in most stocks in May-June and August-September. You can trade on that. Even if you only do 4-5 trades a year, using options on the downside and stocks on margin on the upside. Keep a 5% trailing stop to be safe. Send me 10% of your net gains. :D

Rocketman
 
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doelcm82

doelcm82

macrumors 68040
Feb 11, 2012
3,765
2,776
Florida, USA
Judas1 said:
Apple stocks were ridiculously overpriced previously. This is the new norm. If I had money to spare, I would buy it at this price and hold. It a good deal and they are not going anywhere soon. But they are no longer a growth company. Nothing they come up with now will be revolutionary. Its the inevitable life cycle of a company.
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I remember when Apple was a computer company, making Macintosh computers. Using your logic, they were doomed to stagnate forever as a computer maker.

Then came the iPod, and Apple became a music company (and had to settle with that other Apple over the rights to use the name). Then came the iPhone, and Apple became a smartphone company.

They didn't have your attitude, so they weren't content to muddle along and accept the failure to grow as inevitable.
 
J

Judas1

macrumors 6502a
Aug 4, 2011
794
42
Actually, now that I think about it, I see a lot of ways Apple stock can still slide downward. I can't really see a good upgrade of the iphone 5. With all the constraints they need to deal with like resolution, size, home button, iOS, they can't really do much. Or is that already taken into account with this current price?
 
J

Judas1

macrumors 6502a
Aug 4, 2011
794
42
doelcm82 said:
I remember when Apple was a computer company, making Macintosh computers. Using your logic, they were doomed to stagnate forever as a computer maker.

Then came the iPod, and Apple became a music company (and had to settle with that other Apple over the rights to use the name). Then came the iPhone, and Apple became a smartphone company.

They didn't have your attitude, so they weren't content to muddle along and accept the failure to grow as inevitable.
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They became a different company. they went into music player, then mobile phone, then tablets. That's always an option, but its risky. With the situation, and how comfortably they're sitting, they're not going to be risky. And in general, a company does have a lifespan, and the lifespan is very well understood.
 
Avatar74

Avatar74

macrumors 68000
Feb 5, 2007
1,608
402
TallManNY said:
Okay. So haven't there been well respected academic reports that show that technical trading doesn't work. In addition, you know, to the fact that it just sounds crazy (flying wedges and death crosses and the sort). Can there really be enough folks using this voodoo and those folks have enough money that they can actual move a company the size of Apple?
Click to expand...

"I knew technical analysis didn't work when I flipped the charts upside down and got the same answer." - Warren Buffett

Technical analysis is problematic because it is basically using the chart to predict the chart, and hoping that the next person who does so is only slightly less intelligent/informed than you.

AAPL is underpriced right now but only by a very slim margin. That's assuming DCF projections forward from Dec 12 are still reasonable; if expectations of future operating cash shifted down, then AAPL is likely not underpriced.

But, if Apple initiates a buyback, it'll be because they know something about their pipeline that we don't. However, that should not be a signal that prior acceleration on the stock price will be seen again. There are safer bets to take with wider margins of safety.

If Apple instead initiates a dividend payout, then that would demonstrate that they've done the math and don't feel that the company is underpriced... why pay you $1 for eighty cents when I can trim down what I'm socking away in retained earnings by 2% (because I'm already sitting on $100 billion in short term investments, cash and equivalents)...
 
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A

ArcaneDevice

macrumors 6502a
Nov 10, 2003
766
186
outside the crazy house, NC
Amazing Iceman said:
Wow! Stock has terribly collapsed after Steve's passing.
What did SJ had that kept stock going up?
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Charisma, passion, public awareness, force of will and a singular vision for the future that people could get behind even if it was at the expense of other business relationships.

Without that Apple is a company much like any other with a boardroom full of identical and interchangeable suits.
 
M

MTL18

macrumors regular
Jan 25, 2013
205
72
Judas1 said:
Apple stocks were ridiculously overpriced previously. This is the new norm. If I had money to spare, I would buy it at this price and hold. It a good deal and they are not going anywhere soon. But they are no longer a growth company. Nothing they come up with now will be revolutionary. Its the inevitable life cycle of a company.
Click to expand...

Apple was never valued at a growth company. Companies like NFLX, AMZN, FB, LKDN are examples of growth stocks trading at growth stock values - even GOOG trades at a growth stock (albeit, a conservative one).

AAPL earns 44 dollars per share with growing revenue and earnings. I think this fact is lost whens saying that 430 is the new norm.

My initial attraction to AAPL was that it was a growth stock trading at a blue-chip valuation.
 
R

rcalderoni

macrumors member
Jun 21, 2011
98
34
I am confused

I don't get it. What if you don't want to sell your stock? Is a buyback optional? I don't get why shareholders would benefit from this.
 
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