Investors love when companies pay dividends and when they repurchase outstanding shares of the common stock. Dividends may account for over half of all total returns through time, but these stock buyback plans can in many ways accomplish what dividends may not. There are tax consequences and there are post-buyback effects to consider here.
24/7 Wall St. recently covered the 18 companies that will dominate stock buybacks in 2016. Apple Inc. (NASDAQ: AAPL) was among those companies. Due to such a large balance sheet and such a large existing buyback, Apple is almost certain to land in the top few of all companies buying back billions of dollars worth of stock.
So, just how much money will Apple spend on its stock buyback plan this year alone? It may not be known if this turns out to live up to plan until early 2017. That caveat aside, Apple already spent roughly $3 billion in its first quarter of fiscal 2016 at an average price of $115.45 per share. Its November 2015 accelerated share repurchase period will end in or before April 2016. At December 26, 2015, Apple saw its share count drop on a diluted basis to 5.594 billion from 5.881 billion a year earlier.
If we take Apple at face value, and if we assume no additional buyback funds being committed, Apple could easily be spending some $20 billion for stock buybacks alone in calendar year 2016. As a reminder, Apple’s fiscal year ends in September.
24/7 Wall St.Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
