Is The Apple Buyback and Dividend Plan a Good Idea?

Yesterday Apple announced both a stock dividend plan and a stock buyback. A dividend of $2.65 per share will start with a quarter later this year. In addition, Apple plans to buy back $10 billion of its own stock over the next three years. Currently Apple has about $100 billion in cash. Do you think this is the right move for Apple? What else do you think Apple should be doing with its excess stockpile of cash?

Comments: 22 Responses to “Is The Apple Buyback and Dividend Plan a Good Idea?”

    3/20/12 @ 10:58 am

    Give the stock holders a bigger dividend.

    Use some money to train US workers to work for them and bring the jobs home from China. Apple products should be made here.

      3/22/12 @ 8:55 am

      That would be a GREAT idea! Except that training isn’t the problem, the problem is U.S. workers cost too much. Thats why for the last 20 years most of the U.S. manufacturing has jumped on a boat and gone overseas. As long as business for profit is an issue, it won’t be coming back to the U.S. Unless of course China jumps up and demands higher wages.

    3/22/12 @ 9:00 am

    How about lowering the retail price of Apple products so more people can afford to enjoy them?

      3/22/12 @ 9:25 am

      Per HOUR last Quarter:
      6,988 iPads
      2,355 Macs
      6,974 iPods
      16,775 iPhones

      Only a Socialist would push for lowering price simply to accommodate “everyone”. Apple would be derelict in their duty to the owners (stockholders) to do that! Making a profit is their job – and they’re doing it in an excellent fashion.

    3/22/12 @ 9:18 am

    During the last Quarter Apple was selling 16,775 iPhones AN HOUR! I doubt they believe they have it priced wrong…

    Bob Fisher
    3/22/12 @ 9:24 am

    I think the cash should be directed to fixing lingering problems with software. It seems incongruous that with all that cash lying around they haven’t responded to the multitude of customer’s frustration, and anxiety, over the uncontrolled ‘group’ issue since first reported on Oct. 20, 2011. And, a 1.77% dividend!? How benevolent! I’ll put my money in bonds… see:

      3/22/12 @ 9:27 am

      You arrive at 1.77% how???

    3/22/12 @ 9:49 am

    Invest in R&D. I don’t know why, but I’ve the feeling that Apple is running out of original ideas. Competitors are catching up Apple very fast.

    Also, I’d bring some of the factories to USA. I really don’t care about where the factories are because I’m from Spain, but I’m more confident about things made in USA than the ones made in China.

    3/22/12 @ 11:05 am

    No! stock split!

    Wayne In SC
    3/22/12 @ 11:21 am

    Maybe they are already doing this, I don’t know.

    Upgrade old iPad 1’s to the New iPads for previous owners at a $100 upgrade price (or even lower if possible). Memory for memory even swap. Give the old iPads to elementary schools since they would not need the newer functions. (Breakage would not be an issue for younger students.) You would have a wonderful tax break and we would be buying new apps.

    Thanks for letting me comment,
    Wayne Burress

    shirley anderson
    3/22/12 @ 12:48 pm

    Bring more jobs back to the USA

    Guillermo Fernandez
    3/22/12 @ 1:41 pm

    Donate to charities, Apple has made so much money from people who can afford their products, since they are relatively expensive , but what about the poor, people that can not afford their product, specially kids in public school that would love to have an IPad to play and do homework etc. During these difficult economic times where there’s still a lot of people unemployed and high gas prices I bet there are so many of these people less fortunate.

    Lloyd in Summerfield, Fl
    3/22/12 @ 2:20 pm

    I’m glad to see they are giving back some of those billions. I hope I’m still around to see the day they have 200 billion in the safe. BTW, where does one keep that kind of cash?
    So what does a company with the shares they buy back?

    Thanks for listening.

    3/22/12 @ 2:39 pm

    Gosh we only need a $1 million Can to build a new facility for performances, dances and public meetings in our little town in Western Canada and we’re having quite a time putting that money together from our community. If Apple put a small portion of that $100 billion into our facility fund we’d even call it APPLE TOWN CENTRE or something similar.

    Think about it. Apple could create a pile of good will supporting small communities in the world. Our town could be a test case if you like and we’ll report back regularly.

    David Hope
    3/22/12 @ 2:49 pm

    Offer iPads to schools around the world for half price. Parents would probably buy even more than they do now. Win win for Apple.

    David Lambert
    3/22/12 @ 2:58 pm

    They should develop partnerships with some car makers such as Toyota, Ford, Mitsubishi, etc. to produce colorful Apple Edition automobiles which would have some fantastic audio and back seat video features, such as an in-dash player with auto-sync via wi-fi to iTunes in the house when in range. At the same time they could buy SiriusXM and use the spectrum and satellite technology to interface with their Apple Edition cars and deliver custom content.

    Rick Torchia
    3/22/12 @ 4:43 pm

    I agree with David Hope. Steve Jobs talked about putting a dent in the world and Apple has always said that it tires to foster education. Apple just introduced the iBook Author and wants to revolutionize the textbook industry. The biggest hurdle to achieving that is the cost of the iPad. So, here is your chance Apple. Put iPads in schools for dirt cheap by subsidizing them for education and lets get on with making a big dent. Sort of, put your money where your mouth is!

    3/22/12 @ 8:55 pm

    They could fix the prices in australia and bring them in line with currency values or the same price as in america. I just bought an ipad 2 middle model and tracking the delivery it came straight from factory in china at the time our $ was worth more than US$ but unit was dearer than in USA.?????

      3/22/12 @ 9:49 pm

      But doesn’t your price include tax? U.S. prices do not. Seems to be $539 Australian dollars (equals $561 U.S.) for an iPad which is $499 U.S. dollars. So that’s a $62 US difference. But sales taxes in the US run as high as 9% or so. 7% is pretty typical in most cities. So that cuts the difference to $30 or so. Maybe that is some sort of Australian import tax?

    David Thomas
    3/23/12 @ 3:22 am

    Why do it at all. SJ passes away and quick as a flash, the new guys on the block at Apple want to start messing with the finances.
    They did this same thing at Microsoft years ago and ever since the stock has gone nowhere.
    Keep concentrating on the mechanics……

    Rod Tom
    3/23/12 @ 11:13 am

    Let’s see if I got this right:
    If I use a stock broker to help me purchase 100 shares of Apple stock at $600/share from you, you’ve just made a nice profit on those same shares that you purchased at…let’s say…$400/share.
    Exactly how does that profit help Apple? They were your shares. I bought them from you. You bought them low and sold them higher. That profit is now in your pocket not Apple’s.
    I’ve never figured out why people think that stock that is bought and sold between two private stockholders is somehow beneficial to the company that originally issued the stock.
    If someone can explain why Apple, or any company, should start issuing dividends on stock that they no longer own, please explain. Seems like a terribly misguided move to me…not to mention buying back your own stock. Say what?

      3/23/12 @ 12:55 pm

      Apple doesn’t want you to SELL the stock. They want you to BUY it, and hold on to it for a long time. That’s one of the purposes of dividends. If you are getting some cash (sharing the profits) every quarter, then that is an incentive to not sell. Keep the stock for a long time and those dividends add up.

Comments Closed.