Apple Preparing to Offer 'Significant' Dividend for Investors Early Next Year?

steve would never allow a dividend.

nev-er.

Apple will be the industry leader for quite some time but if this is true, the culture of Apple is changing. And in the long run, it would be strange if it didn't.

however there are...consequences.

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Forgive my ignorance, but if these investors are looking for money from a stock that hasn't offered a dividend in 17 years, can't they just sell?

"calls for the company to return some of that money to shareholders have been on the rise"

How does this guy know?

Knowing this for sure would be incredibly valuable proprietary information.
I don't see the upside to Apple for for offering a dividend unless employee shareholders are clamoring for it.

I don't have any vested interest in AAPL, but I hate it when analysts try to drive up with dividend speculation rather than focusing on fundamentals. I find that irritating. Anyway I thought they were keeping funds on hand to allow them to buy into things which might help the long term interests of the company.

That sound you just heard was LTD's heart hitting the floor

Probably just another idiot trying to manipulate the market; but truly sad news if true...this means that Apple doesn't believe in its capacity to grow as much as SJ did since his return as CEO.

Or yet another sign that Cook doesn't have as much backbone as Steve when it comes to dealing with anal-ysts' requests for easy money...either way, it seems like short-term investors will finally profit from Steve's absence.

justinfreid said:

Knowing this for sure would be incredibly valuable proprietary information.
I don't see the upside to Apple for for offering a dividend unless employee shareholders are clamoring for it.

Click to expand...

There still isn't an upside for them. I see wanting to get return on investment but I've always believed that increase in share price should be the goal of shareholders not milking profits away from the company.

Edit funny wiki quote "Proponents of this view (and thus critics of dividends per se) suggest that an eagerness to return profits to shareholders may indicate the management having run out of good ideas for the future of the company"

As an investor, you have to decide if Apple can give you returns better than, say, a 3% dividend would. In the past few years, they've demonstrated that they can do a lot better than 3%. So granting a dividend would sort of signify that they are conceding that they can't think of anything they can invest that money in that would give more than 3% return. So it's not necessarily a good thing.

why would anyone invest in apple these days if they were not going to give out a dividend? their stock is not going to $600. the largest market cap company should share the wealth with the shareholders. i'm interested in the percentage not the amount. viva los apples.

I don't know much about stocks (read: I don't know anything about stocks!), aside from a relatively small depletion of the 80 billion dollar cash reserves, what would be the downside to issuing a dividend to stockholders.

If a dividend is declared, that doesn't require the company to do it every year, does it? Wouldn't a modest dividend encourage more people to buy the stock?

Just interested...

MacRumors said:

With Apple's cash and investments now topping $80 billion, calls for the company to return some of that money to shareholders have been on the rise.

Click to expand...

Eighty billion? Wow. Can't wait to see how much they can collect as they begin working with Cliff Island LLC, Altitude Capital Partners, and Virginia-based Digitude...

I think it's about time that they bring back the dividend. As an investor (on a small level) I buy dividend stocks. Stocks that have a good dividend yield offer protection for when the economy/market isn't doing so well. The dividend yield goes up when the price of the stock goes down. Stocks that typically have a 3% yield or higher are good stocks (I say that with caution because you have to do you homework and buy good companies, i.e. McDonald's, Verizon, to name a couple). If Apple is offering a dividend that yields 3%, you are getting a value stock for sure. It's also good because more people will invest in the stock since they will get some kind of return for their investment.

This explains dividend yield: http://www.investopedia.com/terms/d/dividendyield.asp#axzz1h2NVDDrG

Gee, now they can be like MS. Pay a dividend and the stock goes nowhere for 10+ years.
I see dividends as a last ditch effort to get people to buy your stock. Especially in tech. It's like admitting defeat.
Name one tech company that pays a dividend and still has good stock price appreciation.

Steve had the right idea, IMO.

rickdollar said:

gee, now they can be like ms. Pay a dividend and the stock goes nowhere for 10+ years.
I see dividends as a last ditch effort to get people to buy your stock. Especially in tech. It's like admitting defeat.
Name one tech company that pays a dividend and still has good stock price appreciation.

Steve had the right idea, imo.

Click to expand...

ibm?

Offering a dividend will do nothing but help bring the stock price up.
Which in turn would make the company more valuable in the long run.

Apple has been at an insanely low PE valuation for a while. After a huge run up in preceding years, its phenomenal growth over the last year has not been reflected in its share price. In that environment, declaring a dividend could be a real shot in the arm to get the stock more realistically valued.

I've been awaiting such a development for some time. It does not at all signal that Apple can't grow its profits above 3%. Apple's quarterly profit is getting so high, it would be irresponsibly punishing to shareholders not to return something extra to them, especially since the share price has stalled recently. If you look at the top 10 corporations in the US by market cap (a pack which Apple leads), I think only Apple and Google don't currently pay a dividend. There's no reason for Apple not to share some additional wealth with its shareholders. And it's not like this will affect the cash horde Apple has-it will be a dividend based on future earnings. Now I don't think it has to be too large a dividend, but some sort of dividend would be beneficial, not harmful, as long as it's done in a financially responsible fashion.

Apple's not a struggling large corporation anymore. Apple is a gigantic, immensely profitable corporation. It should stay lean and mean as much as possible, but it doesn't have to continue doing every single thing the same way it did in the past. Moreover, I don't think you can find a quotation or statement from Jobs that was inherently anti-dividend.

Come on, Apple. Sky's the limit, and even beyond. So ****in act like it.

You're about to re-invent TVs, ffs. What are you afraid of?

Why do it?

Hmm, so what"s in it for Apple?

I understand if they want to issue new stocks that they might have a better chance of selling them if these stocks pay dividends.

But Apple does not need to issue any more stocks.
They don't need any more money.

So why would they even think of paying dividends?
What's in it for Apple if they are considered a 'higher value' stock?

Unless they intend to release new stocks, I do not really understand why they would do it...
Explanations welcome.

chezhoy said:

I think it's about time that they bring back the dividend. As an investor (on a small level) I buy dividend stocks. Stocks that have a good dividend yield offer protection for when the economy/market isn't doing so well. The dividend yield goes up when the price of the stock goes down. Stocks that typically have a 3% yield or higher are good stocks (I say that with caution because you have to do you homework and buy good companies, i.e. McDonald's, Verizon, to name a couple). If Apple is offering a dividend that yields 3%, you are getting a value stock for sure. It's also good because more people will invest in the stock since they will get some kind of return for their investment.

This explains dividend yield: http://www.investopedia.com/terms/d/dividendyield.asp#axzz1h2NVDDrG

Click to expand...

Only a fixed number of people can invest in the company. By that I mean the company only has X number of outstanding shares. "more" people can't invest in the company until more shares are issued. More shares = less dividends per share, as the profits are devised amongst more share holders (assuming they even pay a dividend). Apple won't get more investors until it issues more stock. At this point they don't need more investors, because they're sitting on $80B in cash and bringing double digit profit in billions every quarter.

It's not in the company's best interest to offer a dividend. They're better off doing stock buy backs to drive up the share price, as less outstanding shares would be available to the public.

Peace said:

Offering a dividend will do nothing but help bring the stock price up.
Which in turn would make the company more valuable in the long run.

Click to expand...

Flat wrong. It actually means that the company has to rely on cash perks to attract shareholders instead of achieving the same goal through market growth and innovation.

Besides, even a one-time distribution of dividends will lead to moral hazard in the sense that investors, from then on, will start factoring that expectation into Apple's stock price as a virtually-mandatory element for buying its shares.

Once more, I hope this is just a stupid speculator's rumor...nothing good can be seen in such a move by Apple.

Oh Oh

justinfreid said:

Knowing this for sure would be incredibly valuable proprietary information.
I don't see the upside to Apple for for offering a dividend unless employee shareholders are clamoring for it.

Click to expand...

If it were employees they would insist on a stock dividend not cash. This is a rumor by an analyst.

The risks to companies in a time of this much worldwide turmoil is unprecedented. It would be the very last time to issue a dividend or stock buy back. Heck a secondary offering might be a real possibility.

Apple has 40% margins and 40% growth and has a low multiple. It is poised for multiple expansion right after the specter of a European melt down abates and the stockholders get past Steve's death. This is the most loyal group of stockholders on Wall Street.

Apple need not think about dividends until its growth rate approaches something under 10%.

Dividend offerings retard stock capital appreciation. Who would actually want that? On top of all that, this administration has in its "infinite wisdom" scheduled dividends for treatment as ordinary income for taxes.

Let's see, keep the golden goose laying eggs, or a poke in the eye with a sharp stick?

Rocketman

Peace said:

Offering a dividend will do nothing but help bring the stock price up.
Which in turn would make the company more valuable in the long run.

Click to expand...

How's that? I might not be a market expert but don't dividends milk money from a company in the long run. The company only make's money on the initial sell of stock and if you have a big pile of case there's no need for more shares. Where if they pay a regular dividend in the long run they end up paying more then the initial investment and the shareholders retain the share's.

As long as share price is going up that's all investors should hope for. Expecting a cut of the profits and retaining the ever increasing stocks is pure greed.

Isn't most of the $80B sitting off shore in the markets where the product was sold?
Wouldn't the dividend need to be paid in the US?
So it would need to come out of US local profits but it's those profits which drive the US based company investment and growth. As it's not cost effective to bring the money back in to the US to invest/pay dividends there.

Colour me skeptical.