Can buybacks aid Apple Inc.?

Can buybacks aid Apple Inc.?


As when iPhone manufacturer look ahead next month to rise its buyback and dividend program.

MONDAY: As per analyst, Amit Daryanani, once the tech giant provides an update to its capital allocation plan in April, it could be able to boost its buybacks program by $40 billion to $50 billion; through which it might raise its dividend from 10% to 15%. He believes that iPhone 6 and a refresh of the iPad product could be additional catalysts. However, Apple apparently is on risk for its first annual-rate decline in iPhone sales in the current fiscal quarter letting analysts to expect it to sell 10 million iPads as compared to 13 million a year ago.

(Apple Inc. is going to provide an update to its capital allocation strategy once it reports its fiscal 2Q results on 19 April 2016)

One must not forget times that date back to buybacks giving no such benefit to Apple’s share price. Since Apple Inc. paid out its first regular dividend in nearly 17 years on August 16, 2012, its stock has underperformed the broader market.

“Share buybacks and dividends are not working.” – Global Equities Research analyst, Trip Chowdhry who calls it a C-suit.

Not to mention, Apple’s shares have risen 16% since then, while the S&P 500 has gained 44%.

Exclusive reports from Market Watch claim Apple Inc. to have lowered on graph within a year time-span, underperforming the Dow Jones Industrial Average – despite of its expenditure worth $110 billion on buyback last year. As a whole it projects towards company’s 1/5th of $569 billion spent as a whole by S&P 500 companies on buyback programs, in 2015.

In contrast, AT&T Inc.’s shares climbed 19% over one-year timespan, even when it re-purchased fewer shares (worth US$ 300 million) last year.

UPDATE: Apple currently has $30 billion remaining of the share repurchase program it approved last April.

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Javier Davis produces news on stocks, currencies, bonds, commodities, and real estate. His in-depth research covers most of the major financial markets in America, Europe, and Asia. His research is based on the interconnected relationships among economic and technical factors that drive valuations in the markets, with an emphasis on how to formulate investment strategies. From interest rates to inflation to economic growth and much more, the fundamental concepts presented on this website provide an essential foundation of knowledge for investors to profit in stocks, bonds, commodities, currencies, and real estate markets.