Apple investor focus shifts to capital return plans

Apple “investor focus has moved to the company’s plans to boost its returns to shareholders through dividends and stock buybacks,” Patrick Seitz reports for Investor’s Business Daily. “Apple is expected to update its capital return plans with its fiscal second-quarter report in April. At that time, the company should provide specifics on how much of its repatriated foreign cash will be dedicated to dividends and buybacks.”

“In January, Apple announced plans to bring home about $245 billion in foreign profits banked overseas to fund capital expenditures and other uses,” Seitz reports. “‘We think Apple’s solid free cash flow and $163 billion net cash balance will result in a meaningful step-up in capital allocation next quarter,’ RBC Capital Markets analyst Amit Daryanani said in a report Friday. ‘”Given limited appetite to do deals and benefits from current tax reform, we expect Apple to return much of the ongoing free-cash-flow generation back to shareholders.'”

“Daryanani believes Apple will continue to avoid doing large acquisitions,” Seitz reports. “Daryanani also ruled out Apple doing a special dividend from the foreign profits, noting that Apple CEO Tim Cook has explicitly stated that he is ‘not a fan of special dividends.'”

Read more in the full article here.

MacDailyNews Take: Yup.

Think buybacks and dividends, not major acquisitions. — MacDailyNews, January 8, 2018

Another $125 billion in buybacks would be seismic.MacDailyNews, November 18, 2016

Interns: Fire that thing up! Prost, everyone!

7 Comments

  1. I believe dividends should be limited to the net profits for the previous year. Economies are cyclic and a recession (or depression) always demonstrates the huge benefits of a cash hoard to maintain strong operations (including R&D) as well as acquiring companies whose shares are sufficiently low got make them very attractive.

    As far as share buy backs – those should be done when the price of the shares take a hit.

    1. Cash not doing anything is seen as a waste of money for shareholders.
      Whilst dividends are good for increasing holdings via dividend reinvestment, reducing the shares outstanding via buybacks reduces costs of dividend payouts.
      I believe Apple will use a lot of the money for buybacks.

      1. Having long term savings, is never a waste, that applies to people as well as companies. Apple should keep 200 billion in cash-savings at all times. Dividends yes buybacks no…

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