“Apple’s latest quarterly report showed savvy investors two things clearly,” John Shinal reports for USA Today. “The first is that the entity run by CEO Tim Cook essentially has been transformed from Apple, the company, into Apple, the bank.”
“The vault of that bank is now wide open, and Cook is sharing Apple’s massive and growing cash hoard — worth $68 billion (and climbing) at the end of June — with its shareholders in the form of fat quarterly dividends and even larger share repurchases,” Shinal reports. “The quarterly results also showed, however, that while no income investor should be without Apple stock in their portfolio, no growth investor should be anywhere near it. By every standard measure of operations, the company’s fiscal third quarter (which ended June 29) was a disaster.”
Shinal reports, “To his credit, Cook (and the company’s board of directors) has recognized that Apple is in a mature, slow-growth phase right now, and has wisely decided to share the past fruits of the company’s success with common shareholders. For starters, it has paid an aggregate of $7.5 billion in cash dividends this fiscal year, and Apple boosted that dividend to $3.05 a share in its most recent quarter, from $2.65 a share paid in the prior two quarters.”
“What’s more, Apple’s board in April increased to $60 billion the amount allotted for share repurchases, according to the filing, up from the $10 billion the company first announced last year. As of June 29, Apple had spent $18 billion of that money buying back its own stock,” Shinal reports. “And, for good measure, the Bank of Apple in May issued $17 billion in bonds, according to its filing, padding its balance sheet to a degree that would make any Federal Reserve banker smile.”
Read more in the full article here.