Barclays: Apple should issue $50 billion in bonds, up dividend yield to 3.5%

“Barclays Ben Reitzes today reiterates an Overweight rating on Apple (AAPL) shares, and a $530 price target, while writing that ‘pressure from shareholders and a significant amount of excess cash on the balance sheet is making Apple consider a much more significant shareholder return strategy,'” Tiernan Ray reports for Barron’s.

“Apple should consider issuing $50 billion in bonds, he writes,” Ray reports. “Apple’s first dividend announcement came a year ago this month… At $10.60 per share annually, that dividend offers a roughly 2.5% yield. Apple should lever up to boost its dividend to 3.5%, or more than $14.75 per share annually.”

Read more in the full article here.

23 Comments

    1. Quite.

      Why should Apple take advice from a company that refused to inform at least two UK news/documentary programmes how much it paid Bob Diamond during his tenure and forced them t employ forensic accounting to discover the figure (£120 million).

      And then there’s the issue of the Qatari money and where it came from and where it went.

  1. From the linked article …..we believe Apple should now be strongly considering tapping the debt markets to “borrow against” the significant overseas cash position.”

    Only somebody as dim as a banker could suggest that a company with a massive surplus of cash should borrow more money.

    1. To be fair, alanaudio, in some cases it does make sense for a company to borrow money rather than spending available capital. However, I do not believe that this is one of those cases.

      I still wonder whether or not Apple could pursue a major stock buyback using its overseas resources. That would enable them to reduce the pile of cash and securities without repatriating it and paying additional taxes while also reducing the number of outstanding shares and supporting the share price.

  2. Apple should issue $300 Billion in Bonds and using the balance of its cahs, go private. Then the markets manipulators will have to spend their time on AMZN and GGOG.

  3. My children used to say “Gimme, gimme, gimme!”

    We cured them of that by saying “No” absolutely every time they behaved that way.

    But I still wear the “Bank of Dad” T-shirt they gave me!

    1. Probably so they can keep offshore cash offshore avoiding 35% repatriation tax. Taking on debt would be much cheaper. Whether it’s the right thing to do is a debate.

      1. Not a debate at all to me. I can’t think of any situation where a company should take on debt to give money to shareholders. Obviously there are times where it makes sense for a company to take on debt but this would not be one of them.

    1. I am a long-time stockholder, but I am an even longer-time customer. I’m so tired of the stock price manipulation that goes on and I don’t want it affecting the decision-making of one of the most extraordinary companies in history. If Apple announced that it was taking itself private, I’d cheerfully sell it my stock and use a little of the gains to pay for the next great thing.

  4. The Manipulator: ANALists many reasons for Apple to borrow money or go out of business but the main reason of course is that if you don’t borrow money from Wall Street we’ll drop the stock. Apple’s reply…we’ll call you a WHHHHHHHHHHHHHHAMBULANCE.

  5. This is ridiculous.
    Pump up the stock and ride it up. When it seems you cannot pump it up anymore, sell at or near peak. MAKE A LOT OF MONEY.
    Denigrate the stock and make it fall. Short as often and as much as possible. MAKE A LOT OF MONEY.
    Push Apple to up their dividends as much as possible. Even pressure Apple to borrow money to pay high dividends (even invent a kind of preferred stock that pays guaranteed, high dividends). MAKE A LOT OF MONEY.

    It’s a long term plan of Wall Street for them to make money and that does absolutely nothing for Apple.

    Bottom line:
    Borrowing money to give it away to whiners so *they* get rich is just plain stupid.

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