NEW YORK (
is holding its annual shareholder meeting today, and there are some big themes that could emerge as the largest company in the
talks to shareholders about its future plans.
Investors will be keeping a close eye on a number of key Apple issues, including use of the company's cash, its supply chain, and its long-term product plans. Apple, as we know, strives for perfection, so it will be interesting to see how it tackles these topics.
Not that Apple has made many mis-steps recently. With shares up more than 26.7% year-to-date and 46.4% year-over-year, the Cupertino, Calif.-based company continues to fire on all cylinders. Sales are growing sharply, as evidenced by
. Additionally, Apple's product pipeline is thought to be exceptionally strong, and CEO Tim Cook has led a seamless transition from the previous regime.
will be live-blogging Apple's shareholder meeting, starting at 12.30 ET:
Here are three of the most important themes that may emerge from Apple's shareholder meeting today:
Apple had $97.6 billion in cash and cash-equivalents at the end of its fiscal first quarter, and investors have been clamoring for a return of some of that cash. At a recent investor conference, CEO Cook acknowledged that
than we need to run the business on a daily basis."
If Apple were to declare a dividend, it would not be the first time it had returned cash to shareholders.
Apple paid dividends
when Steve Jobs was ousted from the company, from April 1987 until October 1995. Since then, Apple has held on to its cash.
Recent comments by both Cook and Apple CFO Peter Oppenheimer have fuelled speculation that Apple would return some of its cash to shareholders.
Several analysts, including
Toni Sacconaghi and
Baird Equity Research's
William V. Power believe Apple is increasingly more likely to pay a dividend.
"We have long argued that Apple should look to return cash to shareholders for two principal reasons: first, that holding the cash - with a current yield of
less than 1.0% - is value destroying for investors; and second, that a return of cash to shareholders, particularly a dividend, would significantly broaden Apple's investor base to value and yield investors," Sacconaghi wrote in a recent research note. He rates shares outperform with a $600 price target.
Following Cook's recent comments at the Goldman Sachs investor conference, Power raised his Apple price target from $550 to $600, as he believes a dividend is now more likely. "Apple's CEO Tim Cook indicated that the board of directors continues to focus more time on the use of cash, which seems to increase the likelihood of a dividend and/or stock buyback," he wrote in a research note. "We continue to believe that even a conservative 2% dividend yield could help attract an additional wave of investors."
Power rates Apple shares outperform.
readers recently voted
of an Apple dividend, with nearly 70% of them expecting Apple to use some of its cash to return to shareholders.
Apple is notoriously secretive about its product plans, helping to build anticipation for its latest, greatest, gadgets. After Steve Jobs passed away last year, many wondered whether there was a product strategy already in place to keep Apple ahead of rivals such as
in consumers' hearts and wallets.
Set against this backdrop, rumors of a new
technology have swirled for months. Cook seemed to hint that Apple may be expanding its living room strategy at the recent Goldman Sachs investor event.
Rumors are also rife that the company will launch the
in the coming weeks. This would be in addition to the iPhone refresh expected later this year, as well as any other as-yet announced product refreshes.
In reality, Apple will probably not reveal any future product plans at the shareholder meeting, but it may try to assuage investors' fears that the company could run out of ideas anytime soon.
Supply Chain Issues
Apple's supply chain
has been in the spotlight recently, particularly after
The New York Times
highlighted worker safety issues. Cook addressed some of these issues at the Goldman Sachs conference last week, but shareholders and activist groups will certainly press Apple again on this issue.
"Apple takes working conditions very, very seriously," Cook said during the conference. "We care about every worker - we believe that every worker has a right to a fair and safe work environment."
Recent media reports prompted Cook to send an
, saying the company cares about every worker in its supply chain.
Apple recently hired the
Fair Labor Association
to audit one of its Chinese manufacturers,
, and found
that need to be addressed.
Apple has worked diligently on improving its transparency, from releasing
its supplier list,
to making Cook more accessible to the media than his predecessor. Apple clearly cares about its image, and the supply chain is a major part of that. There is no doubt that shareholders will want this addressed today, and will be anxious to see what Cook has to say.
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Written by Chris Ciaccia in New York
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