“Apple Inc. receives a lot of attention on its share repurchase program. Oddly, it is somewhat controversial, with some writers condemning it,” J. M. Manness writes for Seeking Alpha. “Many believe that Apple was hammered too hard, and still is undervalued. Others have noted that the company has gone from one of the greatest ever growth stories to a stabilized company with at best a very slow growth future. It has, of course, the most incredible income, and so has changed into more of a dividend investor’s stock.”
“There’s clearly some truth here. There is no way that Apple will repeat the exponential growth of the decade from 2004 to 2014 when revenues grew from just under $10 billion to $200 billion, an incredible 20 times. Obviously, this is impossible to sustain.,” Manness writes. “To dividend investors, however, growth is less important. They want steady, dependable and increasing dividends at a good rate (yield).”
“Viewing dollars spent in repurchasing shares as equivalent to dividends may not be appropriate to all investors, particularly those who want immediate incom,” Manness writes. ” However, it may be for some who are ready to view it as dividends reinvested in stock purchase. Viewing in this light makes Apple much more attractive to the dividend investor.”
Much more in the full article here.
MacDailyNews Note: Apple plans to provide investors with our annual update on the capital return program in the spring.
Impossible to sustain? Have you time-travelled to the future to verify this doofus?
In 2006 I bought in Apple shares. Since the dividends have been issued, I have reinvested in aapl. My share number has increased 10% in that time. That may not seem like a lot but given that dividends only started in 2012 it is not that bad.
Also note that that 10% is now valued at 150% of my initial investment.
So if you have patience, dividend reinvestment can add to the growth of your portfolio value. Remember though, that once a dividend is issued the stock price will be reduced by the value of the dividend. The stock price will need to go back up to realize any real gain.
I bought most of my Apple stock back in 2004 and I never expected any dividends. However, since Apple started giving me dividends I greatly appreciate them. As I’ve retired, those dividends pay for all my monthly utilities and that’s wonderful for me. Any share gains Apple gets is simply icing on the cake.
I remember back before when Apple wasn’t buying back shares and it seems all of Wall Street was wailing and begging Apple to buy back shares. Now that Apple has been buying back shares, you have some nincompoops claiming Apple is stupid for buying back shares. I swear, some people are never pleased with anything Apple does.
Why is it that Jeff Bezos supposedly never does anything wrong with Amazon? It’s like everything Amazon does is praised endlessly. With Apple, take that one thing that Apple has that no other tech company comes close to having and that’s a global retail chain. Apple never gets any respect for that and I think Apple’s retail stores drives lots of return customers and consumer loyalty.
I know Apple isn’t the most perfect company around but I think the company deserves far more praise than it is getting. I’m not going to quibble about Apple’s lower P/E compared to other companies in the same business, but if Apple’s P/E is valued properly than I think a lot of rival companies’ P/Es are definitely being overvalued. I still can’t figure out how Microsoft has a much higher P/E than Apple. Apple’s fundamentals are much better. If Microsoft’s P/E was a few points higher, then fine, but being almost double Apple’s P/E makes no sense at all.
Dividends represent a substantial and respecable lucrative income to serious long term Apple investors, with well accumulated shares. It’s what alllows AAPL holders to laugh off the FUD slinging analists and agent orange type voids who talk the talk but can never walk the walk and what separates the men from the boys.
Hmmm, just wondered if the commenters above bothered to read the entire article and not just the snippet on this page. It seems few of them didn’t and one or two others say things that are just incorrect.