On Apple's $40 billion, and the question of dividends

Guerro, Chris does have his facts straight. I learned about this just yesterday. As we all well know by now, Obama made a lot of promises he had no intention of keeping.

As for dividends, my father mostly invested in stocks that gave dividends. Now that he has passed away, my very elderly step mother lives entirely on the dividends she receives each month from all the stock investments he built up. I used to hope Apple would do the same, but with this current administration I have changed my mind.

40B is about 1.1M for each employee. If Apple wanted to become 'the most respected company -ever-', it could spend $4B setting up a trust that pumped money into employees' retirement 401k funds or IRAs, that would be about 100K towards each employee's long-term financial health.

How much does the company earn in interest on that $40 Billion? I'm sure that's a factor.

It's time for Apple to bring 100% of the manufacturing back to the USA. This move would pay for itself in gained USA sales. It's time for Apple to make America stronger by increasing our jobs and economy. We are sending far too many dollars away just like we did with the auto industry. When will we learn?

I too vote for a stock split.

Frankly, I think it's old style thinking to think a dividend is automatically necessary.

Apple is clearly a growth stock and the cash is factored in its stock price.

The exchanges of today is vastly different than the 1900's when the US stock exchange was set up where for the most part there was hardly any movement in stock prices minus the volatile years of the 30's ... whereas now we have essentially a 24/7 exchange that reflects WORLDWIDE the stock value - for better or worse.

Dividends for tech companies generally just means a big cash outlay to its founder/large shareholders ...

Or a in MS' case, that was a good choice because the only thing they were going to do with that $32 billion initial outlay was to waste it on another money losing business unit (zune, watch OS, Xbox, etc ...).

Apple on the other hand needs the cash/has the luxury to do things like spending $1 BILLION to lock up DRAM chips or $250 million to lock up ipad screens ... money that will help returns and margins that hover around 35-40% ... in other words, what is a better way to spend that cash - give it to the shareholders or have the shareholders invest in a company that create new products that have a return of 35-50% (or more) ... humm, who here can guarantee a 35% return as Apple's margins for 2010 will unlikely fall below that?)

Just like Southwest's profitability allowed it to bet/buy contracts locking in oil at $35 a barrel while other poorer airlines without the cash flow had to pay up $130 for a barrel?

Which is smarter?

It's one thing for a slow growth company like a utility - earnings are steady with growth always in single digits if not barely breaking 1% ... but for a comapny in a volatile sector?

AND one in which the stock price clearly reflects the cash on hand?

Dividend is an ancient reflex thing that people say without really thinking through what they are thinking ... or in this case, not thinking. It's right for some slow growth stocks but not for Apple right now - maybe when steve Job retires ...

For all the reasons stated Apple should keep on doing it's thing and not declare dividends.

dividends are not the way to go. a huge war chest gives apple options, options that i, as a shareholder, want them to have.

what i would like to see is a split. a nice 3-1 split would drop the share price down around $76, making it more attractive to first time investors and rewarding long-term investors.

yes, i know that technically no money is made from a split, but it signals confidence and generally sets of a wave of investment which traditionally drives the stock price up quickly, generating billions in new wealth for investors without diluting apple's war chest.

in the long run, the only thing better than holding apple stock is holding 3 times as much apple stock.

Perhaps this is crazy talk, but if stockholders would like to get back some of the money they invested, the traditional strategy is to sell stock. To my view, when you purchase stock, the money doesn't really "belong" to you — the stock you purchased does, and the money belongs to the company whose stock you purchased. You can't really have it both ways.

To me, it seems like people want FREE money in addition to the lucrative gains AAPL has made. Anytime someone gets a sense of entitlement, I get a strange urge to slap them silly. Basically, this is a case of "you're doing well, and you can't possibly use all that money, so you should give some of it to me." Just turn that around and see if you'd feel inclined to give someone a chunk of your profits for free.

If the stock you bought does well, that's already a reward in itself. (I'd daresay anyone who has owned AAPL over the last year is not hurting in that sense.) Pushing for dividends boils down to short-term greed that favors the investor, but does little or nothing to help the company continue to grow. I say leave the money where it is or sell your stock. Now stop whining and get off my lawn. ;-)

Stock split would be a better deal for Apple shareholders.

When MSFT declared dividends the price of their stock became flaccid. Perhaps a coincidence with their flaccid product offerings too.