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Apple boosts capital return program, increasing dividend and share repurchase

Jeremy Horwitz Apr 27 2015 - 1:45 pm PT

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Photo: huffpost.com

Expanding upon its previously announced programs to return cash to investors, Apple today announced that it will use a total of $200 billion of cash by the end of March 2017 to fund the repurchase of Apple stock and the payment of dividends. The enhanced capital return program authorizes the purchase of an additional $50 billion of Apple shares, now totaling $140 billion, settles vesting restricted stock units, and increases Apple’s stock dividend by 11% to $0.52 per share. Apple’s dividend will be payable May 14, 2015 to shareholders holding Apple stock as of May 11, 2015.

Apple notes that it has already returned over $112 billion to shareholders, including $80 billion through repurchases of Apple stock. The program will be funded in part using domestic and international debt markets.

“We believe Apple has a bright future ahead, and the unprecedented size of our capital return program reflects that strong confidence,” said Tim Cook, Apple’s CEO. “While most of our program will focus on buying back shares, we know that the dividend is very important to many of our investors, so we’re raising it for the third time in less than three years.”

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Icahn talks increased AAPL buyback proposal, valuing company at $1T in interview (Video)

Jordan Kahn Oct 9 2014 - 2:49 pm PT

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[youtube=https://www.youtube.com/watch?v=_AAM1P-kqFs&feature=youtu.be&list=PLDt0J62yU45s8IgsEx5xPHDIH78IczAxs]

After publishing an open letter to Tim Cook earlier today once again requesting Apple to increase its share buyback program, high-profile investor and Apple shareholder Carl Icahn went on CNBC for an interview to discuss the specifics. Icahn and associates not only discuss the proposal requesting Apple make a tender offer for a larger buyback of shares, but also some of Icahn’s other forecasts and his statement that Apple should be trading at $203 per share, which would put the company at a value somewhere in the neighbourhood of $1 trillion making it the first to do so.

In his letter, Icahn said “our forecasted growth for FY 2016 and FY 2017 more than adequately justifies using a P/E multiple of 19x our FY 2015 forecast, which along with net cash values Apple at $203 per share today.” In addition, Icahn offers some bold predictions in forecasts for yet to be announced product lines including claiming a 4K Apple TV set should arrive for around $1500 in 55-inch and 65-inch variants by 2016. Also factored into his forecast is Apple’s upcoming Apple Watch smartwatch, which he expects to sell “20 million units in FY 2015, 45 million units in FY 2016, 72.5 million units in 2017.”

Apple quickly issued a response to Icahn’s letter today saying it would review its stock repurchase program annually and “take into account the input from all of our shareholders.”

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Apple’s recent buybacks brought highest 4-month returns of any company since 1998

Jordan Kahn Aug 5 2014 - 8:44 am PT

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Data from Bloomberg today shows just how profitable Apple’s recent buybacks have been with the company experiencing the highest returns of any company in over a decade. The buybacks, which were also the biggest ever since Bloomberg and S&P started tracking these numbers, came as Apple stock increased 77 percent over the last 15 months and 25 percent since its $18 billion buyback last year:

Those are the highest four-month returns among the 20 biggest quarterly repurchases by any company since 1998, according to data compiled by Bloomberg and Standard & Poor’s. S&P 500 constituents have spent $211 billion on their own stock this year amid concern the five-year bull market is prone to selloffs such as last week’s 2.7 percent retreat.

The report notes that other companies have been less successful with Microsoft experiencing a 16 percent increase in 2014 following its $3 billion buyback, while others including EBay and Boeing experienced shares falling. The average for the 100 largest buybacks being tracked by Bloomberg is a 5.5 percent increase this year.

Bloomberg adds that “the ratio of Apple’s per-share profit growth to its overall earnings has increased due to buybacks.” That includes an increase of 19.6 percent year-over-year as of last quarter compared to an increase in net income of 12.3 percent.