On the Apple GoodNews front, Seeking Alpha writes:
Apple's Dividend Will Hit $20 Within 5 Years
- Apple is buying back a little over 4% of its common stock per year, which could reduce the shares outstanding to 775 million within five years.
- Dividend investors ought to benefit handsomely as Apple's payout ratio approaches 40% of profits, which still allows Apple to retain more profits than necessary to fund future growth.
- The buyback program plus a ten percentage increase in the payout ratio would alone take Apple's dividend to $20 per share within five years.
When Apple began buying back shares in 2012, I was initially concerned that the stock buybacks would serve as a thinly-veiled guise to just mop up shares created as executive compensation, and I was also worried that Apple would buy back its shares at such a slow place, that it would make the share buyback program essentially a meaningless factor in explaining the company's per share earnings growth.
I've been pleasantly surprised so far to see that those concerns are misguided. The company has reduced its share count from 940 million in 2012 to 899 million by the end of 2013. That's a share count reduction of 4.25% in one year, which puts Apple in that "buyback royalty" category with Exxon and IBM... more