I need my utility company. They are on auto-pay. They scare me with their power. I have no idea how the grid works or trust how I am being charged. I assume we will gang up if things get out of line.
Now Apple has stepped further into the utlity space with their dividend. They have so much cash they can give it back to you. Yawn.
My iPhone is the best utility and best friend. It gives me information, news, photos,directions…magic at will. If I could only drink water from it.
At minimum the dividend today is a sign of confidence in their cash flow and a pander to all the dividend and income funds that have missed this run to come get some.
At worst it’s a sign of the top as it was in 1987…the LAST time $AAPL paid a dividend. If you are a broker or financial advisor there is a new reason for your oldest and meanest clients to call you and berate you for not owning the stock. Yay old people.
As a shareholder, I won TODAY. The stock was up 2 percent and I have a 10 percent dividend coming my way.
Let the double taxation begin!
His point is that as an avid Apple consumer, he buys copies of much of what Apple produces (thus the utility company reference), and their margins create the first tax. Now, to maintain the same profitability, another tax is being laid on for paying dividends. The right answer in turn would have been to just lower prices, something everyone has thought of but I never considered as double taxation like this. He’s absolutely right.
What’s interesting is Apple traditionally has not cared about their stock price because they operate with no debt. There’s nothing to finance. I also got a nice bump from the share price yesterday and promptly sold my remaining ten contracts. It dawned on me that Apple taking the stock price to $1000 will be a little like another company taking their stock price from $6 to $10. I love the liquidity in Apple options, but maybe I’ll start playing the Q’s if Apple is just being a proxy for the greater market (with a bias for the upside).
I thought he meant being taxes for Cap. gains and for the direct income from the dividends (which are getting a special, higher tax of 40%+ incoming years).
It’s 15% now and might go up some next year and that is a marginal rate, not an absolute rate so it is very unlikely that any of us will pay anything near that rate. Or you could manage your AAPL holdings in your IRA and defer taxes indefinitely.
Sounds then like triple taxation! :-)