Monday, March 19, 2012

What Do You Do When You Have Too Much Money?

WSJ, 3/19/2012, "Apple to Pay Dividend, Plans $10 Billion Buyback" By JESSICA E. VASCELLARO And MIA LAMAR

Apple 手上的現金、約當現金、短期或長期高流動性資產的現值大概是 $100 bn 左右,佔市值將近 20% (公司市值用上星期五收盤市價計算為 $545.97 bn)。 這筆現金目前既沒有什麼用途,對於公司來講也帶來不了夠高的報酬率,所以不如發還給股東。

Apple 不愧是吊人胃口的高手,發表產品之前吊大家胃口吊幾個月,連發佈個現金用途也在前一天宣佈次日上午九點再告訴大家。不過是個 conference call 也要這樣子預告,搞得今天一堆媒體都在猜來猜去。

Steve Jobs 不贊成買回自家公司股票或發現金股利,不過 Tim Cook 在這一點上比較有彈性。去年美國政府在舉債上限危機的時候,LA Times 有一篇文章提到蘋果手上的現金比美國政府還多。現在是時候告訴大家該怎麼處理這筆錢了。AAPL 的市值已經衝破 $500bn 大關,股票價格也短暫衝過 $600 了,衝 $600 bn 或 $700 大概沒什麼意義吧?

今天看到一些科技媒體在談這筆錢可以買下全世界所有的電話公司。我不知道這個估計是否有些誇張,不過 Apple 當然不會也不能這麼做。如果他們有想買的東西,照理講應該早就買了,所以這筆錢以現金股利形式發放的可能性最大。在發出現金之後他們的 ROA 和 ROE 也會立刻上升,同時 EPS 沒有理由發生明顯變化,因此 P/E ratio 會下降。能不能填息 (股價回到發放現金股利前的價位) 我不敢打包票,不過股價上漲的機率應該很高。

Apple 最後公佈的計畫是買回最多 $10 bn 的股票以及一季 $2.65 的現金股利,相當於一年 $9.88 bn 的股利支出。不只 ROA 和 ROE 會上升,他們的 EPS 也因為股票買回會上升。目前看來股票買回只是一次的事情,以去年現金從 $59.7 bn 增加到 $97.6 bn 的速度來看,就算將來公司成長速度減緩,他們手上的現金還是會越來越多。如果蘋果沒有什麼重要的購併計畫可以進行,未來現金『問題』還是會越來越嚴重。

That is a good "problem" to have.


Ben said...

When it comes to dividend policy, I am with Modigliani and Miller - it shouldn't affect the value of a stock, in theory of course. In reality, the "price" of a stock will most likely respond to a firm's dividend policy changes in the short to medium term.

As long as the management can allocate capitals better than the overall market, they can keep my capitals for as long as they want. The problem is that most management start funding their pet projects with marginal ROIs when they have too much money on the balance sheets. By returning cash to shareholders, it takes away the temptation to spend foolishly and to enforce financial discipline.

CCLu said...

M-M dividend irrelevancy works to a certain degree. The problem is whether and how the firm is using the cash they could distribute to shareholders.

Take Apple as an example. Their profit margin is insanely high comparing to its peers or firms in almost every industry. If they can find a way to reinvest the profit and obtain similar rate of return, I'm all for it.

However, that is not the case. Liquidity of an asset is usually negatively correlated to its profitability. When Apple cannot find a good place to make those money work, it is a waste to let them keep those greens.

This also shows how flawed some simple yet popular valuation indexes we've been using. For example, P/E ratio is arguably the most popular financial ratio used in valuation. This ratio does not account for the pile of cash Apple is holding. One can always "adjust" the reasonable P/E ratio which applies to Apple, but that is too much an art.

Ben said...

There are reasons why tech companies, in general, tend to keep more cash on their balance sheets than firms in other industries. Tech grave yards are littered with one-hit wonders like Wang, Digital, Atari, Palm, Commodores, etc. Apple itself came close to going out of business before Steve Job's return in 1997. Tech obsolescence is so rapid and dramatic that one missed product cycle usually means the end of a firm's independence or, in worst case, existence.

I am sure that Steve Jobs learned his lessons well from Apple's dark days. However, I agree with you that Apple's current cash balance is excessive, but if Steve Jobs had not passed away, it might be years before Apple pays a dividend.