Apple Reportedly Preparing to Announce Larger Dividend or Stock Buyback

[Rocketman]

How has Apple's stock buyback worked out so far?

Near as I can tell, it amounted to about 70m shares or 7% in the past 3+ years.

 

[codefuns]

Do you get that $44 at the end of year if you hold 1 share of apple stock?

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.

 

[Mebsat]

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.

Buybacks of common stock take place in the market, so Apple would simply purchase shares during normal trading from willing sellers.

You may be thinking about a reverse stock split (where a company revalues its shares). Also preferred shares often have callback provisions, but Apple has no preferred shares.

 

[Squeak825]

AAPL really is a bargain right now....if only I had $40k to throw around.

Who says you need $40k? Buy 10 share for $4000, or 5 shares for $2000.

 

[HockeyMike]

Wow! Stock has terribly collapsed after Steve's passing.
What did SJ had that kept stock going up?

"Be a yardstick of quality. Some people aren't used to an environment where excellence is expected." - Steve Jobs

 

[tadthemacfan]

Wow! Stock has terribly collapsed after Steve's passing.
What did SJ had that kept stock going up?

SJ had an endless vision.

 

[futbalguy]

Wow! Stock has terribly collapsed after Steve's passing.
What did SJ had that kept stock going up?

The stock is still 15% higher than it was when ST died. Thats not too bad considering how much it has fallen. The crazy growth was mostly after he died.

 

[Dan--]

I concur - no special dividend. It's like forced selling. Does nothing for someone if they want to hold, and makes them pay taxes to boot.

P/E is still very low, even for a non-growth company.

And PEG ratio too.

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.

You don't have to sell. Apple buys AAPL from people that want to. It benefits the shareholders in the following ways, all of which tend to drive up the price of the stock:

• By creating additional demand
• There are fewer shareholders to split future earnings
• If Apple knows its shares are undervalued, it's a good investment for themselves
• If people believe that Apple thinks it's a good investment, it improves their perception.

 

[Squeak825]

You don't have to sell. Apple buys AAPL from people that want to. It benefits the shareholders in the following ways, all of which tend to drive up the price of the stock:

• By creating additional demand
• There are fewer shareholders to split future earnings
• If Apple knows its shares are undervalued, it's a good investment for themselves
• If people believe that Apple thinks it's a good investment, it improves their perception.

And, if they don't retire the stock, they can use it as incentive stock options for employees without having to further dilute existing share holders.

 

[lwapps]

[url=http://cdn.macrumors.com/im/macrumorsthreadlogodarkd.png]Image[/url]


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 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.

Image​

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

I can't see the stock ever rising again to its former glory.

 

[kingtj]

So...

How much Apple stock does Buffett hold in HIS portfolio right now?
Just askin' ....

No brainer. Listen to Buffett.

 

[IJ Reilly]

Way too much focus on Einhorn. Stockholders have been militating for a dividend for many years now, starting long before one was finally declared and longer yet before Einhorn made his proposal. The question was asked at stockholders meeting after stockholders meeting, but was brushed off while Steve was alive.

 

[charlituna]

I would imagine that any news in this regard would give a boost to the stock. Which wouldn't hurt.

And might be the whole reason for saying it. even if they know that it's not fact

----------

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.

doesn't matter. the most BS part of this rumor is the notion that they would announce a stock issue and a product at the same time. It's two different games. IF they were going to do something like this and it's ready or close to ready they will do it at the conference call or via a press release. Not dilute a product announcement with this stuff

----------

Wow! Stock has terribly collapsed after Steve's passing.

actually it went through the roof and then crashed. If Steve's death were the cause of a drop then why the upswing first. Doesn't track logically that it first went up and then down

 

[albusseverus]

I still think Jobs had the right idea. No dividends. Cook shouldn't have caved.

Now Wall St knows he's their bitch and they'll manipulate the stock price to get Cook to roll over and eventually play dead—because, let's face it, those hippies aren't members of Wall St's club.

So I'm left with two options

• this is another effing stupid Apple rumour, like NFC in iPhones, and I can just ignore it
• buy back, now!

I'm fine with either option. Stock price has nothing to do with company performance—it's big boys' gambling with the fate of companies. If Cook let's stock price control Apple, it's all over.

And we won't even be able to buy knock-off Samsung phones, because all they'll have to steal from is Windows phone…

 

[bretm]

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.

Their goal is to be the best maker of personal computers. You don't think the iPad and the iPhone and the iPod Touch and as well the air and the retina are the future of computers? It ain't desktops. There's no growth to be had in desktops.

 

[Bonte]

Would a stock split /10 be a good idea? This and a higher dividend would do the trick i think.

We can't expect for Apple to grow as hard as it did i guess.

 

[bretm]

I still think Jobs had the right idea. No dividends. Cook shouldn't have caved.

Now Wall St knows he's their bitch and they'll manipulate the stock price to get Cook to roll over and eventually play dead—because, let's face it, those hippies aren't members of Wall St's club.

So I'm left with two options

• this is another effing stupid Apple rumour, like NFC in iPhones, and I can just ignore it
• buy back, now!

I'm fine with either option. Stock price has nothing to do with company performance—it's big boys' gambling with the fate of companies. If Cook let's stock price control Apple, it's all over.

And we won't even be able to buy knock-off Samsung phones, because all they'll have to steal from is Windows phone…

I don't know about Cook. What has he done?
iOS 6 - meh. Maps disaster.
iPhone 5 - Not bad. Probably had nothing to do with that.
iPad - new connector, P'O'd iPad 3 buyers.
Gave employees extra benefits, gave to charities.
Gave back dividends.
And on top of it all, can't run the supply chain for squat apparently as they didn't have iMacs available for 4 months while people want them.

Nothing special. Nice guy though. I guess.

 

[Squeak825]

Would a stock split /10 be a good idea? This and a higher dividend would do the trick i think.

We can't expect for Apple to grow as hard as it did i guess.

Stock splits don't achieve anything of value for shareholders. It is the equivalent of trading in a $10 bill for 2 $5 bills. You still have the same amount of value.

 

[Schizoid]

...does that graph refer to frozen orange juice or pork belly stocks?

 

[RonDMC]

Not really, it was just ridiculously overvalued recently. They were a bargain 10 years ago.

Can you explain how it was overvalued?

 

[Yojimbo007]

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.

Interesting... How do u know nothing they do will be revolutionary?
U know for a fact what they plant to introduce in the next 1 to 10 years?

 

[Apple Corps]

Buffett is so yesterday....

 

[Yojimbo007]

I don't know about Cook. What has he done?
iOS 6 - meh. Maps disaster.
iPhone 5 - Not bad. Probably had nothing to do with that.
iPad - new connector, P'O'd iPad 3 buyers.
Gave employees extra benefits, gave to charities.
Gave back dividends.
And on top of it all, can't run the supply chain for squat apparently as they didn't have iMacs available for 4 months while people want them.

Nothing special. Nice guy though. I guess.

U live in lala land!

 

[Fatalbert]

Not really, it was just ridiculously overvalued recently. They were a bargain 10 years ago.

"Was" is right.
It was overvalued at $700, when analysts predicted that it would go to $1000 and be the first trillion-dollar company. Nope, I sold at $700 and laughed.

 

[Apple Corps]

I don't know about Cook. What has he done?
iOS 6 - meh. Maps disaster.
iPhone 5 - Not bad. Probably had nothing to do with that.
iPad - new connector, P'O'd iPad 3 buyers.
Gave employees extra benefits, gave to charities.
Gave back dividends.
And on top of it all, can't run the supply chain for squat apparently as they didn't have iMacs available for 4 months while people want them.

Nothing special. Nice guy though. I guess.

Sadly - this is where I am as well - and started opining on the topic over the past year. Sticking a "supply chain" guy into the CEO position was questionable. I know Steve gave Sir Johnny special design authority but what has Sir Johnny delivered lately?

The more time passes the more concerned I become. Where is the China Mobile compatible chip and contract? What about the Mac Pros? Aperture X? Pandora like service? The stock has taken a beating. It will not improve until Tim & Team fill the news void with exciting new offerings - who knows if they can deliver anything?