dividends

Apple Earnings Dividends and Stock Split

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Apple is one of those companies that draws more than its fair share of attention. There are both the so-called fanboys, and plenty of haters out there to talk at high volume whenever the company does anything. However, the company is also a key component of the S&P 500 and most NASDAQ indexes. In other words, what Apple does as a publicly traded company matters to your personal finance. Apple 2014 Q2 Earnings You’ve probably seen the news by now. Apple had what many analysts are calling a blockbuster quarter. In particular, analysts were surprised by the increase in Apple’s revenue for the quarter. In a way, this is just further proof that analysts don’t really have any sort of crystal ball that regular investors don’t. Apple long ago stopped giving guidance to Wall Street. Without that guidance, Wall Street really doesn’t have a clue how things are going for Apple beyond what things like channel checks can tell them. If you want to read about Apple’s second quarter earnings, there are several reasources including Marketwatch, and Apple’s investor relations website. However, for long-term investors in Apple stock, the quarterly earnings are not the story. What is the story is …

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Is Microsoft a Good Investment Now?

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Like many others in both technology and finance, I haven’t really looked at Microsoft as more than a staid company in a long time. However, recent events have necessitated a re-examination of the company. Is Microsoft a Buy or Hold? In the fantasy world of investment recommendations and analysts, buy, hold and sell, don’t really mean anything. Wall Street firms are reluctant to rate a stock as a sell lest it hamper their chances of getting investment banking business or other lucrative fees from the covered companies. Thus, most investors know that a “hold” rating is pretty much a sell rating. That doesn’t leave much room, so analysts added ambiguous ratings like Market Perform, and Overweight, among others. Whether or not it’s smart to invest in Microsoft depends, as always on your goals and risk tolerance. That being said, certain recent moves have made Microsoft an attractive play for an investor looking for a technology sector investment. First off, Microsoft is a company in flux. Two seismic level events this summer make any investment in the corporation a bit of a leap of faith. The CEO, Steve Ballmer is retiring. Truthfully, there aren’t many who are losing any sleep over …

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Apple Stock Paying Dividends

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Apple (AAPL) announced that after years of building up a massive pile of cash with its record earnings that it will begin to return some of that money to shareholders. Apple will pay a quarterly dividend of $2.65 per share starting in July. It will also repurchase up to $10 billion in stock over the next three years. So, what does this Apple announcement mean for the stock and for the company? Apple Dividend At first blush, Apple’s announced quarterly dividend seems very large. But, how much is Apple’s dividend? It works out to $10.60 per year. That’s higher than most companies pay out in dividends. However, remember that Apple’s stock price is much higher than most companies. The stock currently trades around $600 per share. That makes the dividend approximately 1.8 percent, which, while respectable, is nothing to write home about. Why did Apple announce a dividend now? There are several reasons that Apple has finally decided to start paying a quarterly dividend after refusing to do so for years. First, and foremost, is that Steve Jobs is no longer around. Apple’s iconic CEO had the street cred to tell people, “No dividend,” no matter how high the companies cash balance got without …

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IBM Boosts Share Buyback Again

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IBM must really hate the idea of paying a big dividend. Every year, it seems, IBM authorizes billions of more dollars for share buybacks while increasing its dividend by the smallest amount possible. Then, the company goes on to crow about how it has returned "… over $109 billion since 2008 to our shareholders through share repurchases and dividends." Anyone want to guess how much went to share repurchases and how much went to dividends? If you are thinking 50/50, you aren’t even close. As The Register points out, the share buybacks are a lot more beneficial for IBM executives hoping to keep the earnings per share, or EPS, growing at the proper rate to "earn" their bonuses than they are for shareholders looking to increase the value of their holdings. Of course, there is nothing illegal or even unethical about IBM’s giant share buybacks, but it does raise the question, "Can’t IBM come up with anything better to spend its money on than its own stock?" If not, shouldn’t shareholders just get a check instead of the world’s biggest pile of treasury stock? The company authorized an additional $7 billion dollars to buy its own stock this time around …

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Banks to Buy Back Shares, Raise Dividends After Passing Fed’s “Stress Test”

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Several major banks, including most of those deemed “too big to fail,” are set to raise their dividends and announce large stock repurchases after passing the latest Federal Reserve “stress test.” Banks and financial institutions that have repaid their government bailout TARP funds and passed the stress test have been given the go-ahead by the Federal Reserve to make new capital-based decisions such as increasing their dividend payouts or doing share buybacks. Shortly after the Fed’s announcement, the financial sector came alive with press releases about how the banking stocks would take advantage of the new allowances. J.P. Morgan announced both a higher dividend and a share buyback, for example. Banks Raising Dividends After Drastic Cuts During the height of the banking crisis, most banks and financial stocks were forced to cut their dividends to minimal levels, or even to zero. Eliminating their dividends took away one of the major reasons to invest in financial stocks, which historically have provided solid dividend income to investors. Even the the financial sector’s best preferred stocks were forced to slash their dividends. The quick moves by the big banks and Wall Street firms to reverse their dividend cuts offer a glimpse at how …

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Are Share Buybacks Really Good For Shareholders?

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IBM released their quarterly earnings. As is customary, the company announced various financial numbers like how much it earned per share and how much revenue it generated for the quarter, and so on. As is customary for IBM, the company also announced yet another giant share repurchase using shareholder money to buyback IBM shares of stock. The idea of a stock buyback is that the company figures that its stock is undervalued on the stock market. By buying shares of stock at those low prices, the corporation is increasing shareholder value by making a good investment in itself. Theoretically, those shares repurchased by the company at a low price can be used to pay out earned stock options, for example, at a lower cost. But, IBM — along with many other companies — has perverted the concept of a share repurchase or stock buyback. IBM Stock is currently trading near an all-time high stock price. While, it is possible that even at that price per share the company believes its shares are undervalued, that is not what is really going on here. IBM Stock Buybacks Share Repurchase Run Amok IBM is not a “new” tech company like Microsoft, Google, Amazon, …

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Safely Earn More Interest on Your Money

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I am always a bit curious when I read a cover story headline like the one on Kiplinger Magazine this month. It says 18 Ways To Earn 5% or More On Your Money. A lot of readers will make an assumption that goes along with that headline that they are talking about low-risk investments or no-risk savings products. After all, it doesn’t take a degree in advanced personal finance to know that there are literally thousands of ways to earn 5% or more on your money. Of course, most of those also come with a way to lose 5% or more on your money too. That is not what the article is about. Instead, this particular article, whose article title inside the magazine is, “Great Rates In A Low-Yield World” manages to give a better clue. The article is NOT about where to open a savings account to earn 5% or more. It is about how to get 5% YIELD on your investment. That is, 5+ percent as income, and not counting losses on invested capital. Real Earnings Are About More Than Dividends and Interest Unfortunately, while the article does indeed uncover available investments earning a 5% or higher yield, …

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