“Nothing lasts forever. Academics rightly point out that the average lifespan for a growthie is 5 years. Only a handful hold their primacy for a decade or more. Polaroid flamed out. Xerox ended up buying a brokerage house,” Martin Sosnoff writes for Forbes. “The Watsons called in an outsider, Lou Gerstner to reorganize the structure and tiers of management at IBM.”
“Carl Icahn probably topped out Apple with his noisy acquisition of a 1% holding and afterward his pronouncement that Apple was headed to $250. Luck and pesetas, Carl,” Sosnoff writes. “Nobody wants to face clear indicators of market saturation of the worldwide iPhone market. Further, Apple’s diversification and new product development outside telephony is long cycle in nature.”
“What investors have to work with is Apple’s balance sheet and income statement, which is as powerful as it gets. From a liquidity standpoint Apple is a financial fortress with enormous free cash flow and a low multiple of enterprise value to free cash flow of 6.4 times,” Sosnoff writes. “Apple’s quarterly dividend is currently 52 cents a share. Assuming Apple falls into the no-to-minimal growth category comparable say with AT&T, Pfizer and Verizon Communications, it would need a 4% dividend yield to attract value and income biased shareholders.”
“The history of growth companies making great acquisitions or major diversification gambits is nearly entirely negative. Apple’s board of directors should pound the table. Put a $4 a share dividend in place and buy back 25% of the stock tout de suite,” Sosnoff writes. “Apple is a wait ‘n’ see piece of paper, best underweighted.”
Read more in the full article here.
MacDailyNews Take: For 30+ years, people have underestimated Apple. When Apple IIe was selling like hotcakes, these zero imagination dullards thought that was all there was. That’s it. Just like Polaroid. A one-hit wonder.
Puleeze. You don’t have the foggiest understanding of Apple, Marty.
Oh how I would love that but……Marty must be high.
Wow, that would be nice, if it really happened. Until then we just wish for our dreams come true.
Thats just silly. Dividends are a waste of money…let me see the company I own stock in pays taxes on the money when they make it…they I pay taxes on the money when they give it to me as a dividend. Stock buyback! Yes PLEASE!
They should kill the the buy back program. They should move to percentage based dividends. ( make more payout more, make less pay less, in dividends ) This way the dividend floats, and that’s fine. It would look bad if they raised it only to have to lower it at some point.
They should buy back and retire shares, less shares out there means it’ll be worth more. I Wouldn’t mind a $4/share dividend! I was wondering if they have a lot of cash over seas, why not purchase Their own stock via shell company on foreign markets?
In addition, they should also pay suppliers, vendors and manufacturers in Euro ( overseas accounts they have in Ireland).
And who says they don’t?
He’s quite right – Apple is no growth engine it was. Perhaps it might be again one day, but it’s hard to grow the largest business in the world at the pace of a startup. Impossible really.
Buy backs enrich the directors, not the shareholders. A decent dividend would also reduce volatility in the stock – the mum’s and dads would be more likely to hang in there for the dividends – at .5% they won’t.
I don’t think Apple need to buy any more shares back – just spend the money on dividends.
Android has caught up with iPhone now – in technology, apps, style… There are advantages and disadvantages to both platforms but no killer advantage for either. Yes, Apple continues to innovate, but it’s incremental and Samsung has it within months.
Apple are off the boil. The standard has dropped, especially in everything else except iPhone. OS/X has been diabolical for two years and, though it’s better now, it’s tired and ignored – mail, for instance, is very old and needs a rewrite – and Apple continue to impose their mail filtering, including the secret filtering which deletes mail before it ever gets to your Mac.
People are leaving and recruitment sources say it’s an unhappy place to work – long hours, screaming managers, secretive and unrewarding. Tesla’s graveyard according to one wag…
In the rest of the world Apple is taking a lot of stick for clever tax arrangements. It’s not good PR and it’s costing Apple business. If you are a Brit or an Aussie you can’t help but ask yourself whether buying an Apple product is the right thing to do when they don’t pay any tax.
They are becoming an ordinary American company, just like people said they would once Steve was gone. There is still some of that brilliance there but it’s rough around the edges and not as convincing as before. They’re just capable now, not brilliant.
Dividends are the best way forward for the share price.
Interesting fantasy you got there. Appreciate the unintended hilarity. Apple’s heard it all before from buffoons like you. You needn’t bother writing their epitaph. They’ll be writing your epitaph before Apple fails.
Lol
@SunbeamRapier
I agree wholeheartedly!
Apple products are not just ordinary, they are borderline ridiculous:
– 16GB iPhone in 2016?
– A Mac Pro that can’t ever be upgraded?
– A laptop with a single, basically unheard of port?
– An Apple TV that doesn’t support 4K in 2016?
– An iPad Pro without ‘Pro’ features?
– A premium music service that breaks iTunes?
– An already dated watch that can’t last a day on a single charge, but can possibly cost as much as a decent automobile?
– Speaking of automobiles… the possibility of a buggy, poorly made, launch botched, Apple Car (frankly, I would be scared to drive one)?
And Apple fans actually wonder why investors have concerns. They have concerns because quality and innovation at Apple disappeared some 5-years ago!
After Stve passed away the said growth was over at Apple, Apple can’t inn0vate anymore, etc….
WELL THEY WERE WRONG WEREN’T THEY???
And they are wrong again. How could they be right on anything Apple, these wall st annalists and gamblers, when they don’t even know how to value the stock or count all the generating revenue streams?
Apple’s got plenty juice left, for years to come.
After Steve passed away they said growth was over at Apple, Apple can’t innovate anymore, etc….
Cook can only coast so long with the company Jobs built.
Yeah greenie, what an ignorant statement, bet you never even heard of Jobs or Apple in the days Jobs built it.
…lol record breaking quarter.. 200k less phones out of 75millionish . One slow quarter guidance …given massive headwinds..
And look at the stupid doom and gloom , end of apple as we know it Bull crap…
But hey i would take 4% yield 😉
Dunno if it is legal. But I would love to see dividend payouts as a function of how long you have owned the shares. Short term owners get no dividend; sorry, not the owners Apple wants. Long-term owners get bigger dividends, proportional with length of ownership. Long-term investors are the ones most companies want to own their shares. So reward them!
Capital gains tax rewards long term holders,who pay less than short term gamblers.
You did not understand what I said.
Differential tax rates is another story.
Capital gains tax treatment applies to shares held at least 1 year. Big deal. I am talking about people who have held Apple shares for _much_ longer time periods than that! 5, 10, 12 years.
They just need to fire Tim Cook!
They’ll still need a replacement CEO and is there any guarantee the next one will be any better. He or she could be a lot worse. It’s unlikely any CEO will be Steve Jobs’ equal.
Thoughtless remark!
I think it is on Apple to make investors long term by providing a bigger dividend. 80% would do it. That means this past year, if you own a share for the hold year, you would have been paid 7+ dollars a share. Even the funds would not sell their shares in Apple. To get a share, would probably be next to impossible.
Dividends should be based on a percentage, and that percentage should not be low, otherwise capital just sits on the sidelines. That is not productive.
As an Apple investor, I would be much happier to see Apple invest in new product development and improved retail services and support.
Also, the executive bonuses should be canceled an the money distributed to Apple’s rank and file.
If liberal Timmy wants to do something profoundly good with his money, he should buy Foxconn and pay iPhone assemblers a living wage — and stop Foxconn production of Google phones.
Heck, I’m greedy – that’d be great and allow me to hang on to my shares much longer.
Apple shareholders will likely see little share gains this year. There are plenty of other companies to make huge share gains from and that’s where the big investors are headed. Apple isn’t building a company to be valuable to Wall Street so nothing much is going to change. Apple shareholders probably don’t matter all that much in the greater scheme of things.
Might as well face it. Wall Street is looking for certain types of companies to invest in and Apple isn’t one of them. I think Apple is a fine company and they’re doing things very well. It’s basically a problem of how Wall Street values companies to make money. Apple shouldn’t change its business practices just to suit Wall Street.
The way you worry about Apple worries me. Do yourself a favour: sell your Apple stock and buy Procter & Gamble. You’ll have fewer heart palpitations and live longer, and the rest of us will be spared the endless hand-wringing.
Again, once the sanity correction occurs, after this hysterical period of WallNut Street hysteria, I’ll care. Until then, nothing makes sense and that’s NOT Apple the company’s fault in the least. Historic record profits. Hello World!
Well, I’m buying Apple. I think $100 is a bargain. Y’all just do what you think. I trust me. I’ve been right since 1999.
One crazy old man to another; I’m with you. All AAPL dividends go back to buying more shares.
“THE SHEMITAH CYCLE” ! ! !
I found yet-another loony factor that has been part of the hysterical hysteria going on with WallNut Street. I posted one link below.
Why I find this to be utterly loony is that, from a religious point of view, that human game we call ‘finance’, etc., is entirely a HUMAN CREATION and has nothing-at-all to do with any actual concept of ‘God’. It has everything to do with humanity, separated from concepts of ‘God’. That humans would connect the financial game system with God is nothing short of raw paganism whereby the graven image is the game token we call ‘money’.
Thoroughly loony.
I have no doubt that this assertion on my part would start a dire flame war in certain circles. For many other people, it seems unfathomable that the religious concept of an END OF TIMES “SHEMITAH CYCLE” could drive the stock market into a state of hysteria. And yet, do a simple search on the term “Shemetah Cycle” and observer how nearly all of the search links deal specifically with the game system of finance. It’s stunning! As in head shaking stunning. Observe one such reference:
Is 7-year biblical ‘Tribulation’ about to start?
Millions of investors concerned about the Shemitah cycle are watching stock markets and economies in these dark days of September.
Will the Dow crash, they wonder, like it did in the past two Shemitah years, 2001 and 2008, or will the dollar collapse and take the U.S. economy down with it?
Not Mark Biltz.
The founder and pastor of El Shaddai Ministries is watching for something much bigger.
The start of the Tribulation.
💥🔥😱😵😳😲😵😱⏳⌛⌚☔😪😭😖🔥💥
Seriously. 😛
Correction: “…OBSERVE how nearly all of the search links deal specifically with…”
The Shemitah Cycle
Meaning the last year of a seven-year cycle in the Jewish calendar, the end of the past several Shemitahs have brought immense financial hardships to the world. The 1987 crash on Wall St. happened during Shemitah. The bond market was massacred in 1994. The 9/11 terror attacks happened in 2001 and the global economic crisis occurred in 2008.
The Shemitah Year is the seventh year of the seven-year agricultural cycle mandated by the Torah for the Land of Israel and is still observed in contemporary Judaism. It falls very close to a simple 7yr cycle between highs seen in the chart below….
This year, the Shemitah ends on Sunday September13 [2015] – very close to the Hybrid Lindsay forecast for a high on September 11.
(0_o) (o_0)
Heck, I’d be happy with a $1 per share dividend. Minimal solace for atrocious stock performance.
You have to consider that Apple needs to pay the dividend with US cash. They cannot borrow for that and they do not have much cash in the US. Therefore the key will be to reduce the stock # so that dividend can be increased.
My bet is that Apple will increase the dividend to $0.75 per quarter in April.
A Dividend increase would be a very smart move next earnings report. Let’s get to at least $3 per share per year. Besides us shareholders always reinvest our dividends into new Apple products. I’ve bought a fair number of iPhones and recently Apple Watch with AAPL dividend money.
Feels great to buy Apple products with Apple money. It’s a beautiful circle of progress!