My thoughts on Apple’s buyback and dividend.

As a follow-up to this article from yesterday:

I think it’s a great idea. It gives current shareholder’s an incentive to hold on to their stock, it will attract new shareholder’s, and it doesn’t hurt Apple’s cash reserves very much – if at all.

– Current shareholder’s will get a dividend, which is what they’ve been asking for for years. This is good news for all the pension funds, etc. that are heavily invested in Apple’s stock.

– Future shareholder’s have a great incentive to buy into Apple’s stock, which will broaden the shareholder base for Apple.

– Apple has made 13 billion of profit in the last quarter alone, so the payout of 45 billion over the next three years will slow their cash pile-up down, but it won’t actually harm their 100+ billion a lot, considering that they will make up for it while they pay out the 45 billion. Plus, as Tim Cook and Peter Oppenheimer noted in yesterday’s conference call, they will re-evaluate periodically, meaning if things change they have an easy way to discontinue the payout after the initial run.

Tim Cook has been the CEO for around 200 days now, and already we’re seeing his mark on the company in so many ways.

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3 comments on “My thoughts on Apple’s buyback and dividend.

  1. mesanford says:

    You know, everything you say here is 100% right on the money. It still makes me just a bit anxious because I don’t believe that Apple has faced a real test in the post-Jobs era quite yet. That will come when it’s time to introduce a completely new product/line. Great post.

    • scottph says:

      Thanks!
      Yes, it will be interesting to see, but I’m guessing we’ll have to wait a few years for that to happen. From what I understand there are a few years of products, both evolutions and new stuff, already in the pipeline.

  2. mesanford says:

    Reblogged this on Marcus Sanford and commented:
    Exactly right. I guess there was really no other logical choice to make but this one.

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