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Discussion in 'Apple, Inc and Tech Industry' started by dingdongbubble, May 11, 2008.
So I was wondering how much dividend a shareholder gets on every Apple share? And how often?
There aren't any. The 2500% return over the last 5 years should be enough however .
Keeping in mind that I dont live in the USA and I am not involved in shares, trading and investments and stuff, how can I purchase and later on sell apple shares?
If you are in the UK, try iWeb.
Sad but true -- the last Apple shareholder dividend disappeared many years ago. They should declare one now, but there's no indication that they ever will.
By using e*trade® or if you have $10,000 use Charles Schwab.
Yes, I think you mentioned in a previous thread that they could quite easily offer a dividend with the enormous reserves they've got, and without really denting the wallet.
You could buy shares on the LSE (see:ACP).
I'm not becoming tiresome on this subject, am I?
Without rechecking my numbers, I believe I calculated that Apple could declare a very healthy dividend of $2.00 per share at a cost of around $1.5 billion. Considering that they're currently toting around $19 billion in cash on the balance sheet, that's not a huge hit by any means. When a company is sitting that much cash, to paraphrase Michael Dell, they should give some of it back to the stockholders.
^^ So the 2500% growth isn't enough .
Personally, I think its worth them having as much cash as Microsoft, so that if Steve Ballmer finds an actual good buy Apple can bid on the company too.
The cash is a byproduct of the growth. Paying out a dividend is way of rewarding investor patience. They get to share in the success without having to sell their investments.
Companies rarely use cash alone for major acquisitions, they use some combination of cash and stock. Microsoft had to finally admit that they were sitting on an embarrassing amount of cash, and declared a dividend.
Bottom line is Apple, flush with cash, yet dictated by SJ and a compliant board, is not an "investor friendly" company.
-In general, an aura of nonchalance in regards to investor relations (i.e. earlier this year when Steve said it was not his job to reassure/comfort/address investors after AAPL's massive slide)
-No recurring dividends
-No hint of large one time dividend a la Microsoft in 2004
-No stock buy backs
-No stock splits
-Not even a glossy annual report
Of course I believe Apple is "maximizing shareholder value", but they have yet (since the mid-90's) to give any actual cash back to investors.
Why should SJ and the rest of the board care? He knows the shareholders would never stand up to him or the board after Apple's recent success. He also knows, that he can claim he's not receiving any cash back from the company either with his $1 salary (of course that is ridiculous because one can assume there are many, many, personal expenses he can classify as business expenses that Apple pays for).
Where does this leave Apple? In great position for continued growth with ample cash and resources for new product development, acquisitions, and other large undertakings, yet at the same time a volatile stock that the market loves to play with because investors currently have no way to profit from AAPL other than flipping the stock.
I don't believe that splits or glossy reports are a useful measurement of investor friendliness, and I don't pretend to know the company's philosophy behind accumulating mountains of cash. I do believe that a growing wad of unused cash is indicative of a less than optimal management strategy which also sends a subtle, negative signal to investors. A dividend, even a one-time dividend, would be taken by investors as a sign of confidence by the board.
Keeping investors happy in the short term is a sure fire way to sink your company in the long term.
Apple has been a fantastic investment.
Apple remembers nearly going bankrupt, and having a $19 BILLION moat sure helps in case time gets lean again - you can't assume that because Apple has been doing unbelievably well lately that every quarter will be better than the last.
Apple has zero debt. This makes CFO's cringe because they want to 'put the money to better use'...however this adds risk. Apple is bulletproof with this moat.
Apple can buy almost any other company without blinking, if they want to (other than other ginormous behomeths like itself). They don't have to raise capital. They don't have to 'apply for a loan'. They can just write a check.
Apple can invest heavily in Research and Development (R&D) if they wanted to. They actually spend one of the lowest R&D budgets of the tech companies currently. The real product they sell is fantastic/must have design with mediocre components - but used in such a way it seems like it is magic, future technology.
Apple should continue to tell Wall Street to piss off and keep doing what works. The instant they start pandering to wall street, or changing what they are doing to make a good quarter, the magic of the business is destroyed.
They are just simple, common examples of ways that companies can cater to investors that Apple does not currently take part in.
Possibly, but nobody is talking about short-term. Dividends are a long-term commitment to investors which reward investor patience and reduces volatility. They show confidence in the future. Sitting on huge and growing piles of cash with no clear plan to use it for growing the company can be viewed as a pessimistic signal from management.
I guess I don't care about glossy annual reports. Every one of them I get is tossed immediately. Splits don't really cater to anyone. In reality, most investors know that they are utterly meaningless.
Close, might have changed for some of them.
Of course splits have no real impact, but they are usually viewed favorably.
It's nitpicking, my main point was that Apple is not "investor friendly". These two examples were at the bottom of my list, and were only used as supporting evidence to bolster the more relevant components of my conclusion.
That is a good point, but I would argue that Apple DOES have plans for their money, but it might be somewhat less exciting then most would hope.
Either they do have some giant acquisition planned that nobody knows about (they are secretive, and tipping their hand by telling shareholders what they plan to do would ruin their ability to do effectively), or the other part of the plan is as I said before - building a moat so big and so strong that any economic downturn, bad judgement on product refreshes that harm sales, several major launches in a row that are duds, etc, etc won't harm Apple and they will 'live to fight another day'.
I liken it to people burned in the mortgage crises. When times were GOOD those that played very aggressively and bought too much house managed to get away with it and look like geniuses while home prices were rising. This is what investors want companies to do in good times. Run it razor thin, don't keep a 'rainy day fund' (it could be making more $$!!) etc, etc. But, when things go bad, these same investors get foreclosed on and lose their homes or have to declare bankruptcy. The more conservative people who bought an appropriate level of house that they can support then look like the geniuses.
Apple is positioned for the very, very long haul and as a long term investor, I prefer it that way. Yes, they might do better but the added risk isn't worth it, to me.
When I sell my shares in about 37 years, I'm confident they will have continued to appreciate and weathered whatever economic nastiness has taken down many of their competitors.
Finally, Apple is currently in a trendy, fad-dy cycle right now. When the 'Apple Wave' subsides, I want them to have gigantic bundles of cash to re-ingnite the next fad.
But I don't completely disagree with you, I think many people feel the way you do.
It isn't easy to spend $19 billion, even in a big merger/acquisition deal, which probably wouldn't be all cash anyway -- Apple has huge equity to trade in any such deal. To me, the cash hoard looks defensive, which isn't a good place for a corporation to be. Maybe they'll make some big investment to grow the company, something none of us expects. More likely, they'll just continue to stack it up in more and bigger piles -- which is anti-capitalism in motion. We shall see.
There last dividend was in 1995. I'm a proud, very proud shareholder. Lack of a dividend means nothing to me. I own a bunch of other stocks that yield 4-5% anyway.
Taking pride in owning stock -- I'm not sure I follow that concept. Put it this way, I'd be a happier Apple stockholder if I didn't need to liquidate any part of my investment in order to realize any gains. The longer I hold the shares, the harder it becomes to not sell any. This is what happens when a company refuses to offer any dividend.
If you sold for profit late in 2007 you'd be very happy. I take pride in all the companies that I am long. It certainly feels good to be rewarded for my investment. I have positions that are for long term also. In fact, late this past week, I unloaded some shares that just fell into long term capital gains (15%).
What you are suggesting is precisely what I am trying to avoid. My investments in AAPL are very long-term, to the extent where any sale would be essentially 100% taxable as capital gains. Apple is forcing me to sell and be taxed in order to realize any benefit for being a patient, long-term investor in the company. Considering the mountain of unused cash they are building up, I think this is a policy which grows more ridiculous every day.
What has pride got to do with it?