Why do they enjoy the luxury of trading at such ridiculous multiples?
Why don't they pay a dividend?
I mean yeah Apple beats estimates but still has a multiple of like 25. That is ridiculous.
What is the basis behind this?
And why no dividend. I mean Apple has current assets of $33.8 million. They have no real liabilities. So why not pay some of this cash out to the shareholders? What is the real benefit in holding this cash for Apple?
Guess you can get an okay return from the cash to boost profits but still. Why not pay some out.
Just wondering peoples thoughts. #1 is my real question though.
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To remove first post, remove entire topic.
two questions I have are:
Why do they enjoy the luxury of trading at such ridiculous multiples?
Why don't they pay a dividend?
I mean yeah Apple beats estimates but still has a multiple of like 25. That is ridiculous.
What is the basis behind this?
And why no dividend. I mean Apple has current assets of $33.8 million. They have no real liabilities. So why not pay some of this cash out to the shareholders? What is the real benefit in holding this cash for Apple?
Guess you can get an okay return from the cash to boost profits but still. Why not pay some out.
Just wondering peoples thoughts. #1 is my real question though.
WS, well put... Both companies' explosive growth rates justify their high P/Es.
Also, VH2, don't look at these companies not paying a dividend as a bad thing. Many companies, tech especially, believe they can spend their money better in other ways (acquisitions, invest in new technologies, hire more engineers, etc) to keep their high growth rates.
You could almost look at dividends as a company saying, "Our best growth days are behind us. We don't know how best to use all of our cash, and we will now pay a dividend to our shareholders to keep their interest in our stock."
Think Microsoft as exhibit A.
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WS, well put... Both companies' explosive growth rates justify their high P/Es.
Also, VH2, don't look at these companies not paying a dividend as a bad thing. Many companies, tech especially, believe they can spend their money better in other ways (acquisitions, invest in new technologies, hire more engineers, etc) to keep their high growth rates.
You could almost look at dividends as a company saying, "Our best growth days are behind us. We don't know how best to use all of our cash, and we will now pay a dividend to our shareholders to keep their interest in our stock."
A multiple of 25 is not very high for tech, historically tech has very high multiples and can keep rising.
If a company is showing signs of growth and earnings are rising then investors are willing to buy now in anticipation of this continuing and are buying future earnings 6 months or 1 year from now.
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A multiple of 25 is not very high for tech, historically tech has very high multiples and can keep rising.
If a company is showing signs of growth and earnings are rising then investors are willing to buy now in anticipation of this continuing and are buying future earnings 6 months or 1 year from now.
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