Boomers, Markets & Money

A Down-to-Earth Discussion of Financial and Lifestyle Information for Baby Boomers

Survey Says: Give Apple Common Shareholders a Slice of Cash

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DSC_1165Tech companies have a hard time accepting that they’ve grown up. Acceptance of middle age doesn’t come easy to any of us, I guess.

Weekday mornings I read the CFA Institute Financial Newsbrief, an email newsletter that collects financial articles from around the world. It’s an easy way to scan many stories quickly. This week’s poll caught my eye because it concerned Apple and dividends, two hot topics in the investment world.

The poll asked was: “What is likely to provide Apple shareholders the highest risk-adjusted rate of return on the company’s excess cash balances?” SmartBrief was kind enough to allow me to share the poll results.

Poll of readers of the CFA Institute Financial Newsbrief. Weekday email newsletter sent out by Smartbrief.

CFA Institute Financial Newsbrief. SmartBrief

I voted for the top choice: “Common stock dividends, including a one-time or a series of special dividends” which received 45.04% of readers’ votes.

Here’s why:

Companies have a natural life cycle. When they are young, they need to reinvest earnings to grow the company. As they mature, they generate more money than they need to expand. Apple clearly has enough cash it needs to research, develop, and manufacture new products.

Executives will be tempted to do something foolish with excess cash.  They might acquire a company that doesn’t add value for shareholders. Or compensate themselves excessively.

• Individual investors are looking for dividend-paying stocks because they are searching for yield.

If you want to scan a selection of stories from numerous publications quickly on the investment and business world you can sign up for the CFA Institute Financial NewsBrief. SmartBrief also offers email newsletters for other industries and all are offered at no charge.

APPLE ON FLOWERED PLATE Red Delicious

Author: financeboomer

Boomers, Markets & Money is a down-to-earth discussion of financial and lifestyle information

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