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There's a lot of talk about Apple starting to pay out dividends to stock holders. This could be huge for two reasons. The obvious being that you start making mo

There's a lot of talk about Apple starting to pay out dividends to stock holders. This could be huge for two reasons. The obvious being that you start making money now rather than waiting for capital growth. The second, less obvious, is that some investors hold the rule that you don't buy stocks that don't pay dividends. If Apple started to pay dividends it would open doors to even more investors. I would assume this would help their stock rise at an even faster rate. I would still buy Apple stock if I had the cash on hand. I think a possible split would make the stock even more attractive as well. ~530/share makes it somewhat hard to make a meaningful investment.

LukeRB 15y ago
I've been a shareholder since 2007 and I would seriously consider selling if they offered a dividend. Offering dividends is not what true growth companies with good plans for the future do. FWIW, I'm far from risk-averse; I wouldn't invest in a single company that offers a dividend due to the implied lack of growth and innovation that is implied by giving away retained earnings that could be used for R&D, strategic acquisitions and new business initiatives. In Apple's case, this includes new markets/products, increased retail exposure and strategic exclusive supply chain deals. I hope, for Apple's sake and our own, that they don't offer a dividend anywhere in the near future, if ever.
- lix2333 15y ago
  This is correct. It would be a huge event if Apple started paying dividends and I'm fairly certain the market would not react kindly to that. The reason is, the market is pricing the Apple stock high due to what they think is coming in the future. They see lots of growth and expect the stock to increase in price. If Apple starts pay a dividend, that means they have decided that they aren't a high growth company anymore, and more of a stable giant (CocaCola, GE, etc). So all the analysts who thought they were going to have a certain amount of sales and growth have to readjust their predictions. Lower earnings predictions = lower stock price.

LukeRB 15y ago

I've been a shareholder since 2007 and I would seriously consider selling if they offered a dividend. Offering dividends is not what true growth companies with good plans for the future do. FWIW, I'm far from risk-averse; I wouldn't invest in a single company that offers a dividend due to the implied lack of growth and innovation that is implied by giving away retained earnings that could be used for R&D, strategic acquisitions and new business initiatives. In Apple's case, this includes new markets/products, increased retail exposure and strategic exclusive supply chain deals. I hope, for Apple's sake and our own, that they don't offer a dividend anywhere in the near future, if ever.

lix2333 15y ago
This is correct. It would be a huge event if Apple started paying dividends and I'm fairly certain the market would not react kindly to that. The reason is, the market is pricing the Apple stock high due to what they think is coming in the future. They see lots of growth and expect the stock to increase in price. If Apple starts pay a dividend, that means they have decided that they aren't a high growth company anymore, and more of a stable giant (CocaCola, GE, etc). So all the analysts who thought they were going to have a certain amount of sales and growth have to readjust their predictions. Lower earnings predictions = lower stock price.