Yahoo: 1995 - 2011 Review.
Yahoo (YHOO) Review 1995 -2011
Long-term Yahoo investors find this information of interest.
What has happened to revenue, net income, dividends, share repurchases and long-term debt, for the 17 years, 1995 through 2011? To find out 10-k filings at http://www.sec.gov were reviewed.
The value of the firm is generally determined by earnings power and or the dividend yield. Cash used to repurchase shares may result in a dividend payment lower than it could be, or no dividend. Or lower growth in revenue.
The first thing that stands out:
The growth in revenue at Yahoo has been breathtaking.
The amount of cash provided to departing owners was surprising.
What happened to long-term debt?
What happened to revenue?
1995: $ 1 million
2002: $ 953 million
2003: $1,625 million
2004: $3,575 million
2005: $5,258 million
2006: $6,426 million
2007: $6,969 million
2008: $7,209 million
2009: $6,460 million
2010: $6,324 million
2011: $4,984 million
What year had the highest revenue?
2008: $7.208 billion
What year had the highest net income?
2005: $1.896 billion
What happened with net income?
1995: Net loss of $0.634 million
2002: Net income was $ 42.815 million
2011: Net income was $1,062.669 million
How much treasury stock been retired?
2011: $1.203 billion
2010: $1.867 billion
2009: $5.268 billion
Total: $8.338 billion
What percentage of net income was paid out in cash the past 17 years?
0.0% was enjoyed by owners as dividends, or $0.0 billion
112.3%% was enjoyed by departing owners, via share repurchase or $8.7 billion
How many years was cash paid out?
0 years for dividends totaling $0.00 billion. A $0.00 billion year average
9 years for treasury stock purchases for nearly $8.720 billion. A $0.969 billion a year average
What percentage of revenue went for dividends and share repurchases?
00.0%: 17 year total for dividends
17.5%: 17 year total for share repurchase
00.0% of revenue in 2002 went for dividends
10.5% of revenue in 2002 went for share repurchases
00.0% of revenue in 2011 went for dividends
32.5% of revenue in 2011 went for the repurchase of shares
What percentage of net income was paid out in cash during 2011?
152.3%: Share repurchases
152.3%: Total payout
Why have departing owners enjoy more cash than owners?
The board of directors, elected by shareholders, decided it is in the best interest of shareholders for their cash to be given to departing owners.
What does the 10-k say about dividends?
The 10-k for the year ending December 31, 2005 said:
"We have not declared or paid any cash dividends on our common stock. We presently intend to retain our future earnings, if any, to fund the development and growth of our business and, therefore, do not have plans to pay any cash dividends in the near future."
The 10-k for the year ending December 31, 2006 said:
"We have not declared or paid any cash dividends on our common stock. We presently do not have plans to pay any cash dividends in the near future."
Notice the change in wording?
Gone was the wording about retaining future earnings for fund development and growth of the business.
What happened to cash used to repurchase shares after the change in wording?
2001: $0.060 billion for share repurchase
2002: $0.100 billion for share repurchase
2003: $0.000 billion for share repurchase
2004: $0.000 billion for share repurchase
2005: $0.388 billion for share repurchase
After change in wording:
2006: $2.777 billion for share repurchase
2007: $1.834 billion for share repurchase
2008: $0.079 billion for share repurchase
2009: $0.113 billion for share repurchase
2010: $1.749 billion for share repurchase
2011: $1.619 billion for share repurchase
What was the adjusted monthly high price for 2000-2011?
2000: $80.51 in January
2001: $18.66 in January
2002: $ 9.23 in April
2003: $22.51 in December
2004: $37.68 in December
2005: $40.23 in November
After change in wording:
2006: $34.38 in January
2007: $31.29 in March
2008: $28.93 in March
2009: $17.81 in September
2010: $16.63 in December
2011: $17.70 in April
$15.50: May 14, 2012 closing price
Source: Yahoo Finance historical prices.
What was the record adjusted monthly high?
December 1999 with an adjusted price of $108.17
If the board is going use owners' cash to repurchase shares, and owners want or need cash. Then they must sell shares. This can put downward pressure on the stock price. Notice the stock performance since the change in dividend wording and share repurchase picked up steam?
Once a share repurchase begins, it can signal that growth in revenue has peaked. There were many factors that resulted in a decline in revenue and the stock price. However, each investor must decide if they want the cash or if they prefer their cash is given to a departing shareholder.
So far it appears that departing shareholders have gotten the better deal. Will that trend continue?
The common stock of Yahoo might be more attractive if it paid a cash dividend instead of repurchasing shares.
What do you think?