Apple Dividend Expected in 2012

February 14, 2012 · 3 comments

Apple (AAPL) is widely expected to announce a dividend eventually, with 2012 being the most likely year.  To date, Steve Jobs had been remiss to reward shareholders with a dividend, being a victim of a cashless Apple when he first joined the company.  But with the hoards of cash on the balance sheet and Steve no longer with us, new management will be under increasing pressure to issue a dividend – if not a recurring payment, at least a special dividend.

As of this writing, Apple is sitting on $98 Billion in cash.  It is not feasible to assume the company can put that cash to work in any meaningful acquisitions or in-house development, so the cash will eventually start to take a toll on measures like “return on cash” and start losing money to inflation and obviously, Apple’s internal return on investment.  At this rate, a simple 2% dividend payment would equate to $10/share at today’s $500 valuation.

Two key discussion time points will be the shareholder meeting in February or board of directors’ meeting in March.  Historically, fast-growing tech companies had shied away from paying dividends, but as they’ve matured, we’re now seeing many companies in the tech-laden Nasdaq index paying dividends.  For instance, in this note on tech dividends, you can see Microsoft, IBM, Intel, Cisco and more paying decent current rate (and growing) dividends.

 

Do You Think Apple Will Pay a Dividend in 2012?

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