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  • Apple Announces Quarterly Dividend and Plans to Buy Back Shares



    This morning Apple announced plans to buy back some of the company’s shares and start paying a dividend to shareholders.

    Apple will begin paying a quarterly dividend pf $2.65 per share starting in July. The dividend is equal to a yield of 1.8% measured against the stock’s closing price. Not a massive number, but for those holding a substantial number of Apple shares the payout could be quite sweet. The dividend will cost Apple around $10 billion this year, but the company generated close to $16 billion in cash during 2012’s first fiscal quarter and Stern Agee and Leach inc. analyst Shaw Wu predicts Apple will generate $75 billion in cash total during 2012.

    Also, Apple announced plans to buy back nearly $10 billion worth of the company’s shares. The buy backs will take place over a three-year period beginning September 30th.

    “We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure...

    Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase programme.” — Tim Cook
    Cook is right, minus the $10 billion dished out via the dividend payments this year, and the buy backs (spaced out over 3 years remember) Apple will still generate upwards of $60 billion in cash this year. Exactly how much of that cash will actually find its way into Apple's cash hoard is up to the analysts to figure out. Still, it must be nice to make more money than you know what to do with. Or make so much, that you know what to do with it, and you still end up with billions left over.

    Source: Bloomberg
    This article was originally published in forum thread: Apple Announces Quartlery Dividend and Plans to Buy Back Shares started by Phillip Swanson View original post
    Comments 10 Comments
    1. KraXik's Avatar
      KraXik -
      I wonder why Tim Cook sold a load if his shares only a few weeks back. He must've known this was going to happen and then push the price up of the shares even further.

      I think he made like $10mill so doubt he cares lol.
    1. GrecoISU's Avatar
      GrecoISU -
      Quote Originally Posted by KraXik View Post
      I wonder why Tim Cook sold a load if his shares only a few weeks back. He must've known this was going to happen and then push the price up of the shares even further.

      I think he made like $10mill so doubt he cares lol.
      If that's true, wouldn't that be a form of insider information?
    1. feidhlim1986's Avatar
      feidhlim1986 -
      Quote Originally Posted by GrecoISU View Post
      If that's true, wouldn't that be a form of insider information?
      Can you really call insider information on a company CEO?
    1. spazturtle's Avatar
      spazturtle -
      Quote Originally Posted by GrecoISU View Post
      If that's true, wouldn't that be a form of insider information?
      No you can't get done for insider trading if you ether run the company or have a controlling share.
    1. Comwiz's Avatar
      Comwiz -
      This will go down as "Cook's Big Folly."
      1. Dividends are taxed twice (companies pay tax on their income, then investors pay tax on dividends)
      2. Their stock price will stagnate (or grow much more slowly). This literally hinders growth. The options market will be drained. Imagine if you had $100 in the bank and you get a 10% interest rate. You would have $110 at the end of the year which would compound the next year. If you start taking out the principle over the year (say $10, which is approx proportional to AAPL's dividend), you would have less at the end of the year (essentially approx $99 in this analogy to Apple). Thus, appreciation will decrease for no real benefit (over time).
      3. While Apple has more money than it knows what to do with, saying that is not a good move for a company. Speculation of the future is being limited by their means. At first, it won't make much of a difference, but over time, this could be bad when their cash in the bank will be the limiting factor.
      4. Buying back shares is fine, especially for Apple.
    1. cuti86's Avatar
      cuti86 -
      There will be ton of New Ipads return back to the stores after 15 or 30 days returning policy expires. Lot of Scalper buyers ordered from Apple online stores or bought as many as they could from retail stores open last friday and put them on craigslist for up to $200 over cost prices. This time all the scalpers got burn, right now you can find the some prices from craigslist go down to even the price cost.
    1. santacruzlocal's Avatar
      santacruzlocal -
      How about Apple plans to give me some shares ... dam I could sure use it !!!
    1. iLoveWindows&iPhone's Avatar
      iLoveWindows&iPhone -
      Quote Originally Posted by Comwiz View Post
      This will go down as "Cook's Big Folly."
      1. Dividends are taxed twice (companies pay tax on their income, then investors pay tax on dividends)
      2. Their stock price will stagnate (or grow much more slowly). This literally hinders growth. The options market will be drained. Imagine if you had $100 in the bank and you get a 10% interest rate. You would have $110 at the end of the year which would compound the next year. If you start taking out the principle over the year (say $10, which is approx proportional to AAPL's dividend), you would have less at the end of the year (essentially approx $99 in this analogy to Apple). Thus, appreciation will decrease for no real benefit (over time).
      3. While Apple has more money than it knows what to do with, saying that is not a good move for a company. Speculation of the future is being limited by their means. At first, it won't make much of a difference, but over time, this could be bad when their cash in the bank will be the limiting factor.
      4. Buying back shares is fine, especially for Apple.
      You sound intelligent....But im sure Apples army of financial analysts and advisors are more intelligent.
    1. AKCHRIS's Avatar
      AKCHRIS -
      I wold Buy some Apple Stock if I thought about it. I could of a Few years back when it was in the Low $300-450 range. DAMN..i feel like a Fool now.lmao
    1. n00neimp0rtant's Avatar
      n00neimp0rtant -
      Quote Originally Posted by Comwiz View Post
      2. Their stock price will stagnate (or grow much more slowly). This literally hinders growth.
      If you haven't noticed, Apple isn't a growth company anymore