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The Board approved a 10.5% increase to the Apple's quarterly dividend, and has declared a dividend of $0.63 per share of common stock, payable on May 18, 2017

The Board approved a 10.5% increase to the Apple's quarterly dividend, and has declared a dividend of $0.63 per share of common stock, payable on May 18, 2017 to shareholders of record as of the close of business on May 15, 2017. Increasing stock buyback by 75 billion as well, showing that Apple believes their stock still has room to grow.

tcoppi 9y ago
> Increasing stock buyback by 75 billion as well, showing that Apple believes their stock still has room to grow. Or means that they have nothing else productive to do with their cash.
- charlesdm 9y ago
  They just have massive cash reserves. They could spend $50bn on R&D for new products, and still have plenty left.
- nodesocket 9y ago
  Typically this is not true. When public companies buy their own stock, this is considered a very positive signal. Apple could do most anything they want (including buying most any company) with their cash hoard.
  - golfer 9y ago
    Not necessarily. IBM has had 20 consecutive quarters of declining revenue [1]. They continue to buy back stock, adding $3B to their repurchase program last year. They've bought back stock furiously since 1999 [2]. It's a defensive measure to reduce the share float, and thereby juice EPS. [1] https://www.bloomberg.com/news/articles/2017-04-18/ibm-misses-estimates-in-20th-straight-quarterly-revenue-decline https://www.bloomberg.com/news/articles/2017-04-18/ibm-misse... [2] https://seekingalpha.com/article/3977909-ibm-bought-155-billion https://seekingalpha.com/article/3977909-ibm-bought-155-bill...
    - nodesocket 9y ago
      True... But I'd say IBM is the exception to the rule.
    - valuearb 9y ago
      It's a good policy to buy back stock whenever you have excess cash flow and the stock is undervalued compared to your other investment options. An example might be your stock has a PE ratio of 8, so it's yielding 12.5% and your other options look to yield 10% or less. Of course I'm not saying IBM is right, or undervalued. If profits are falling a 12% yield might be a 6% yield before you know it, that's why valuations are more complex than my simplistic example. And many companies do buybacks to juice stock prices for the execs options, regardless of value, so it's not a grant signal.
  - tcoppi 9y ago
    And they chose to buyback stock and pay dividends, which means they think those other uses for their cash are unproductive relative to buying back the stock.
- solomatov 9y ago
  From the point of view of shareholders, stock buyback is superior to paying dividends taxwise. If shareholders just hold the stock, the price rises, and they don't have to pay any taxes.
  - jdmichal 9y ago
    Rather, they taxes on it when they sell. Of course, the cost is that you don't have anything in your pocket today. And gains written on paper are just as easy to erase.
    - deleted 9y ago
      [deleted]
  - tcoppi 9y ago
    AAPL also has a dividend. From the point of view of shareholders, growth is better than dividends or buybacks.
blazespin 9y ago
If hold a stock, you pay 0 tax on share buyback gains. Not so for dividends.
- deleted 9y ago
  [deleted]
- tedsanders 9y ago
  Capital gains taxes are typically paid when shares are sold and gains are realized.
- valuearb 9y ago
  It's the exact same rate once you sell.
  - slg 9y ago
    Sure, but you dictate when you sell and must take the dividend whenever it is offered. It is always easier to plan for something you trigger manually rather than something forced upon you.
    - jdmichal 9y ago
      At the cost of having none of that money in your pocket until you sell.
      - stouset 9y ago
        …which you could just do immediately if it's that big a deal. This is not a choice made for retail investors who hold a handful of shares — it won't make a noticeable difference for that class of investor either way. It does, however, make a huge difference for institutional investors and for large shareholders.
  - Fomite 9y ago
    Only if you believe that the capital gains rate will not be different when you sell. Personally, I prefer dividends rather than buybacks from Apple.
smileysteve 9y ago
> Increasing stock buyback by 75 billion as well, That's a substantial buyback, almost 10% of the company.

tcoppi 9y ago

> Increasing stock buyback by 75 billion as well, showing that Apple believes their stock still has room to grow. Or means that they have nothing else productive to do with their cash.

charlesdm 9y ago
They just have massive cash reserves. They could spend $50bn on R&D for new products, and still have plenty left.
nodesocket 9y ago
Typically this is not true. When public companies buy their own stock, this is considered a very positive signal. Apple could do most anything they want (including buying most any company) with their cash hoard.
- golfer 9y ago
  Not necessarily. IBM has had 20 consecutive quarters of declining revenue [1]. They continue to buy back stock, adding $3B to their repurchase program last year. They've bought back stock furiously since 1999 [2]. It's a defensive measure to reduce the share float, and thereby juice EPS. [1] https://www.bloomberg.com/news/articles/2017-04-18/ibm-misses-estimates-in-20th-straight-quarterly-revenue-decline https://www.bloomberg.com/news/articles/2017-04-18/ibm-misse... [2] https://seekingalpha.com/article/3977909-ibm-bought-155-billion https://seekingalpha.com/article/3977909-ibm-bought-155-bill...
  - nodesocket 9y ago
    True... But I'd say IBM is the exception to the rule.
  - valuearb 9y ago
    It's a good policy to buy back stock whenever you have excess cash flow and the stock is undervalued compared to your other investment options. An example might be your stock has a PE ratio of 8, so it's yielding 12.5% and your other options look to yield 10% or less. Of course I'm not saying IBM is right, or undervalued. If profits are falling a 12% yield might be a 6% yield before you know it, that's why valuations are more complex than my simplistic example. And many companies do buybacks to juice stock prices for the execs options, regardless of value, so it's not a grant signal.
- tcoppi 9y ago
  And they chose to buyback stock and pay dividends, which means they think those other uses for their cash are unproductive relative to buying back the stock.
solomatov 9y ago
From the point of view of shareholders, stock buyback is superior to paying dividends taxwise. If shareholders just hold the stock, the price rises, and they don't have to pay any taxes.
- jdmichal 9y ago
  Rather, they taxes on it when they sell. Of course, the cost is that you don't have anything in your pocket today. And gains written on paper are just as easy to erase.
  - deleted 9y ago
    [deleted]
- tcoppi 9y ago
  AAPL also has a dividend. From the point of view of shareholders, growth is better than dividends or buybacks.

blazespin 9y ago

If hold a stock, you pay 0 tax on share buyback gains. Not so for dividends.

deleted 9y ago
[deleted]
tedsanders 9y ago
Capital gains taxes are typically paid when shares are sold and gains are realized.
valuearb 9y ago
It's the exact same rate once you sell.
- slg 9y ago
  Sure, but you dictate when you sell and must take the dividend whenever it is offered. It is always easier to plan for something you trigger manually rather than something forced upon you.
  - jdmichal 9y ago
    At the cost of having none of that money in your pocket until you sell.
    - stouset 9y ago
      …which you could just do immediately if it's that big a deal. This is not a choice made for retail investors who hold a handful of shares — it won't make a noticeable difference for that class of investor either way. It does, however, make a huge difference for institutional investors and for large shareholders.
- Fomite 9y ago
  Only if you believe that the capital gains rate will not be different when you sell. Personally, I prefer dividends rather than buybacks from Apple.

smileysteve 9y ago

> Increasing stock buyback by 75 billion as well, That's a substantial buyback, almost 10% of the company.