Will Apple Finally Offer a Dividend?

Most analysts believe that Apple (AAPL) does not have to offer a dividend or share buyback to keep investors in the stock. But will that soon change? Katy Huberty, an analyst at Morgan Stanley said Apple is "more likely than ever" to turn to either method to return part of the firm's $76 billion in cash to shareholders, according to Bloomberg.

There is a precedent among big tech companies to offer dividends as share price increases slow. Microsoft (MSFT) decided to give shareholders a huge reward when it issued $30 billion in a special dividend in 2004 and said it would buy back billions of dollars in shares over a four-year period. It also promised to use $75 billion to enhance shareholder value.

A number of Silicon Valley's older elite companies pay dividends. Microsoft's is $.64, or 2.5%. Intel's (INTC) is $.84 which, translates into a rich 4.30% yield. Cisco's (CSCO) is $.24, or 1.5%.

One reason why Apple may decide to issue a buyback or dividend is a changing of the guard. Steve Jobs clearly was unwilling to offer shareholders anything beyond the growth in the stock's value. New CEO Tim Cook and the board may feel otherwise.

Another reason Apple's management may decide that enhancing shareholder value is that its shares are no longer rising quickly. The stock is up 120% over the last two years and just over 40% in the last year. In the last month, the shares are basically flat. If the stock market fails because of a sharply slowing economy, Apple's stock may not advance near-term.

Even if it does make a move, Apple is not likely to do anything dramatic. But investors certainly want to know what the consumer tech giant will do with all of its cash, which continues to rise by billions of dollars each quarter.




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fmeyer11

stock buybacks do nothing, dividend or nothing

September 14 2011 at 12:46 PM Report abuse rate up rate down Reply
mccglf

Not gonna happen to any meaningful degree. It SHOULD happen, but these companies don't want to let go of the cash and the big stockholders don't want to pay the taxes resulting from a dividend. Buybacks do NOTHING to increase shareholder value....look how well that works for Microsoft, where Gates and friends could easily pay twice the dividend but don't want the tax burden.

September 14 2011 at 6:29 AM Report abuse rate up rate down Reply
AmericanDoughboy

Why would anyone care what Morgan Stanley recommends.....

September 14 2011 at 5:09 AM Report abuse rate up rate down Reply
Dereck

If you honestly believe this "B.S." you should just burn your money in the backyard!

I Like i've been saying the World Fortune Owner "Appropriated, Garnished for all future Earnings, and Consumed" the entire Federal Banking System under the F.D.I.C. Regulations Prohibiting failing Banks from Merging with other failing Banks between 2008 and 2009. This brought the entire Federal Banking System under a "S Corporation" and the "Rules of Incorporation" state that "No Corporation can hold the Shares of a S Corporation"!

September 13 2011 at 9:11 PM Report abuse rate up rate down Reply
clyogi

Amazing that AOL would run this conjecture as if it were fact. Actually, this story contains no facts and is simply a figment of the author's imagination.

September 13 2011 at 8:48 PM Report abuse +1 rate up rate down Reply
fmeyer11

a special dividend would be lovely

September 13 2011 at 6:04 PM Report abuse rate up rate down Reply
salde1

maybe they want to take themselves private after each officer and board member accumulate enough shares from bonuses etc.

September 13 2011 at 5:29 PM Report abuse rate up rate down Reply
jakmatthews8

When are you going to WAKE UP!

The rich are buried in money while we work endlessly for them.

Time to make a change for the BETTER!

Google the term "Simple Stock Cash" and click on the Top ranked site! Go to the Penny' Stock section to find out what the rich do not want you to know.


NOTHING WILL CHANGE UNTIL YOU DO SOMETHING TO MAKE YOUR LIFE BETTER!

September 13 2011 at 12:14 PM Report abuse -2 rate up rate down Reply
dabrownman

They should wait on a dividend until Steve Jobs is dead so they can make him roll over in his grave.

September 13 2011 at 12:13 PM Report abuse +2 rate up rate down Reply
meddvm

Apple's newest machines are starting to show mistakes of getting ahead of themselves - like no CD/DVD drive on the new mac mini. Just because the pad does well with no external storage doesn't mean that is what people want for a work computer. 50% of the population doesn't have regular internet access and most software is still on CD or DVd, same with movies.

September 13 2011 at 12:12 PM Report abuse rate up rate down Reply