Analyst: Apple could double dividend, buy Netflix with repatriated cash under President Trump’s U.S. corporate tax changes

“Apple could dramatically increase its dividend yield if it repatriates foreign profits under U.S. corporate tax changes being considered by the Trump administration, one analyst says,” Patrick Seitz reports for Investor’s Business Daily.

Repatriation could allow Apple to substantially boost its regular dividend without impacting strategic flexibility. If the U.S. allows offshore cash to be repatriated at a reduced tax rate, Apple could comfortably double or triple its regular dividend and still make a meaningful acquisition without impairing its balance sheet. — Pacific Crest Securities analyst Andy Hargreaves

“In addition to raising its dividend, Apple could use overseas cash to bolster its services business with an acquisition, Hargreaves said,” Seitz reports. “Hargreaves thinks internet television network Netflix would be an attractive acquisition target for Apple. ‘An acquisition of Netflix would give Apple a strong growth story in services that are not tied directly to the iPhone, a leadership position in a massive global market, an upgrade in executive talent in video, and incremental revenue and profit growth going forward,’ Hargreaves said.”

Read more in the full article here.

MacDailyNews Take: Just because Apple could buy Netflix, doesn’t mean they should. However, Apple should definitely consider an “upgrade in executive talent in video,” by all means. They don’t have to buy Netflix to accomplish that. They just need to hire somebody who can negotiate deals as SlingTV, DirectTV, and PlayStation Vue executives have done already.

What is unique about Netflix? A handful of TV series are not worth $40 billion. Apple is perfectly capable of taking on Netflix without having to buy them, deal with integrating their employees, etc.

Until Apple actually buys Netflix, we’ll keep saying that Apple will buy Netflix for the same reason they bought Palm. — MacDailyNews, May 27, 2016

Happy St. Patrick’s Day!

Get your green beers ready and.. Hoist!

SEE ALSO:
Apple’s Eddy Cue alienated cable providers and networks with an assertive negotiating style – report – July 28, 2016

No, Apple doesn’t need to buy Netflix – February 22, 2017
Why Apple should buy Netflix or something – February 22, 2017
Apple’s arrogance said to contribute to struggles to make big deals – February 15, 2017
Apple hires Amazon’s Fire TV head to run Apple TV business – February 8, 2017
Why Apple should buy Disney – January 26, 2017
Apple’s new TV app shows just how painfully behind Apple is – December 14, 2016
Apple approached Time Warner about possible merger before AT&T talks – October 21, 2016
Apple’s Eddy Cue: Nope, we don’t want to be Netflix – October 20, 2016
Google signs up CBS for planned web TV service to debut in early 2017; close to deal with 21st Century Fox – October 20, 2016
Bernstein: Apple buying Netflix would be a waste of $50 billion – October 5, 2016
A chance for an Apple buyout offer as Netflix stumbles – July 19, 2016
Here comes á la carte programming – without Apple – July 13, 2016
Should Apple absorb Netflix? – July 11, 2016
Apple to buy Netflix? – May 27, 2016
Should Apple buy Netflix for $53 billion? – May 10, 2016
Apple declines to place bid on NFL Thursday Night Football – March 3, 2016
Why Apple should buy Netflix – January 7, 2016
Apple TV 4 is a beta product and, if you bought one, you’re an unpaid beta tester – November 5, 2015
Apple made ‘audacious bid’ for Top Gear trio of Clarkson, Hammond and May, but lost out to Bezos’ Amazon – September 1, 2015
Why Apple should buy Netflix – April 21, 2015
Why Apple should buy Netflix – March 26, 2014
Jim Cramer: Apple should buy Twitter or Netflix to spur growth – February 7, 2013
The Netflix buyout battle: Apple vs. Time Warner – April 10, 2012

29 Comments

  1. Apple along with every other company should be paying to stockholder 80% of the profits. If they, Apple and other companies, want to pay nothing in taxes, fine, they need to pay to share holders 90% of the profits. That Apple and the rest of these companies sit on this money is not aiding the economies of the world.

    Like taxes, only slightly different, it’s the share holders money. I’m sure they can find things to do with their money.
    Think REITS.

    1. You do realize that dividends reduce the price of a share by the same amount issued. That will have a huge impact on share price and likely compromise the value of the holdings.
      Dividends are great for income but needs to be balanced with maintaining the market value of the stock.
      Apple are doing the right thing by buying back stock and giving dividends. If they repatriate overseas cash a good chunk of it should go to paying off debt.

      1. I notice from your S-V agreement that you’re mostly likely UK based, DogGoneToo. Do you, as an international observer of Apple (AAPL), actually own the equity? That is, are you a casual observer/purchaser of the company’s products, or do you aggressively invest your wealth in the company? Talk is cheap here in the USA, as you know; but money-where-your-mouth-is comes at a dear price. My family presently owns 40K of AAPL, and have, continuously, since 1988 through thick and thin. Therefore, we want–and have truly earned–every bit of the company’s dividend payments currently offered. Stock buybacks be damned. They do NO ONE any good, in reality. It is time to put AAPL’s monstrous world-wide cash horde back to work in the hands of people who have supported the company for almost 30 years now.

        1. Good for you. Live in California and have for 25 years (originally from the U.K.)
          I too own shares in aapl and since they have done well comprise a good chunk of my 401k.
          I always reinvest the dividends which to date has increased my holdings by 10%.
          Buybacks have also reduced the shares outstanding by 25% so that is also adding to the value of the stock.
          I personally don’t like debt and would prefer that Apple did not do that. But I also understand that it saves a lot of money and reduces the overall cost of dividends. So whether or not you like it the reality is that Apple’s dividend yield would be less without it.

    2. stick to REITs. You’ve got a hard on for the payouts they are required to make in order to maintain their tax breaks which are unavailable to just about any other type of business. It’s a good deal and is a great investment under some circumstances, but drawing a line to payouts of all other companies from REITs isn’t supported by anything other than your opinion.

  2. Apple is not going to buy Netflix. Why do people keep harping on this? Strong growth in the Mac is not tied to the iPhone. Apple just needs to get their priorities straight and they can do that almost for free, as they might obviously need to fire some people and hire some people. {cough}Executive Staff{Cough}

    1. yes, I agree don’t buy Netflix

      a) Apple should fix their own Apple TV stuff.
      If they can’t fix their own stuff chances are they would also screw up Netflix.

      If Apple thought Netflix had executive talent, then just hire the folks and let them run Apple TV. Cheaper.

      Netflix is expensive because…

      b) Netflix PE (stock valuation) is way too high compared to Apple’s stock.

      c) If you minus expenses Netflix has a negative cash flow (it loses money). so it might actually be a negative drag on Apple’s own stock.

      1. Yeah, Netflix definitely does have a negative cash flow but the stock just keeps rising. Same with Tesla’s negative cash flow and continual share price rise. There are some things I simply don’t quite understand. Apple’s value is always under question as being too high but these other stocks get a free value pass. Whatever.

        Apple doesn’t need Netflix because it can become its own Netflix. It has the necessary cash to fund original content and make the content contract deals on its own. I’m willing to bet if Apple did acquire Netflix, suddenly it’s value on Wall Street would drop like a stone and of course, there’d be plenty of people who would immediately say Apple was throwing away too much money. I think almost any business Apple acquires will immediately lose its value as Wall Street will suddenly point out major flaws in the business that were there all along.

        1. “Apple doesn’t need Netflix because it can become its own Netflix. ”

          The fact that Netflix has a negative cash flow is indeed a problem.

          But in other respects, Netflix does a good job.

          NOT AT ALL SURE I would like people like Eddie Cue and Sir Jony messing with it. Good change is good change Bad change is bad change.

          Likely would be bad change.

  3. Does Apple not have enough money to do whatever it wants to do today?

    Apple doesn’t need corporate welfare. It needs new leadership. Maybe Apple should hire Trump to run the Apple TV hobby. That is an area that needs his kind of greatness.

  4. If Apple did want to strike a deal to buy NetFlix, which I don’t think is such a great idea, they have no need to finance it through repatriation of that money. That money can earn a higher rate of return than the borrowing costs of financing such a deal.

    Besides, who says Netflix is for sale?

  5. I predict there will be no tax change that will allow Apple to repatriate cash. I just don’t feel it will happen, it’s too far outside of the administration’s focus, which is a mess.

    1. Let me make a correction to your assertion: …no change that will allow Apple to repatriate cash for the purpose of acquisition. If the current US gov’t allows repatriation it will have the caveat that such money be used for increasing manufacturing capacity and infrastructure building/repair. Such as: Apple manufacturing/assembling more macOS/iOS devices in USA; laying fiber-optic cable (and renting space on it); installing electric recharge stations (in conjunction with Tesla?); investing in battery and solar facilities; etc… Trump/Congress wants a huge infrastructure revamp, thus any repatriate of cash at a low rate will have big strings attached.

      1. The whole notion of bringing manufacturing back to America has some loopholes I see showing up in articles posted here. I.E.: it’s not jobs for Americans. Robots are the way they come back and frankly there’s not much difference between a robot in America and a job over seas. Sure robots need masters, but likely they will be H1B visa workers anyway. It’s all malarkey. We have to do this better. Do something that’s good for the working class. As someone wrote recently, on Quora, – It’s not how rich the top 1% are, it’s how able the bottom 50% are to seek life liberty and the pursuit of happiness. However if the 1% don’t dole out enough for the common people or suck up all the financial resources, then the system is still broke. The whole trickle down economics theory needs to trickle down for it to work in the first place, which we see it isn’t.

        Also another thing – a human is not worth how much they are paid. They are worth how much they give back to humanity. So a teacher is worth a lot more than they are paid, while a CEO, in most cases is worth not so much as they think they are. We tend to undervalue our own potential.

  6. Repatriation via PERMANENT change to the tax laws regarding foreign made profit would benefit Apple and loads of other companies as well. It would bring more money into the federal and state governments. It would stop Apple from creating debt for the sake of working around the current tax laws. (Apple having to go into debt, while owning massive assets, is utterly ridiculous and is a great indicator that the system is insane). That repatriated money would also be put to work via investment throughout the USA.

    So wake the hell up US Congress! You’re still stalling on this issue? You want to starve and kill the healthcare of the aged, but you can’t sanitize taxes on foreign made profits? This is governance by sociopaths.

  7. If Apple bought Netflix they would assign it to Clueless Eddie Cue who would proceed to fuck it up beyond all recognition.

    Anyway, Netflix is little more than servers and contracts. The other thing is that unlike Apple, they seem to know what they are doing.

    1. Hahaha. You’re an idiot.

      They are in a single market, distribution of content. And therefor that’s all they do. Let’s also compare Apple to Fox sports while we’re at it and say Apple is so far behind and clueless. Or how about CNN or Disney. WTF is wrong with people these days? If Apple wanted to go there it would be dead simple for them to do so. What they aren’t going to do, is follow merrily along and do the same fucking thing.

      Apple could make a $10 computer. Apple could make a $10 phone. Apple could provide a $10 monthly streaming service, etc. THEY DON’T WANT TO AND THEY NEVER WILL. If Apple wats to get into original content, they will PRODUCE IT, not BUY IT. If you don’t know the difference then you’re a fucking idiot.

      1. So does HBO and buying Time-Warner would make more sense. They would get CNN & HBO- worldwide brands, Turner Classic Movies and Filmstruck, a massive library of films, the Warner Studio, TBS & TNT Cable Channels, Cinemax, etc.
        Netflix would get you a pile of contracts and a few people.

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