Business iOS News, apple, business news, cash, dividend, finance, gadgets, profits, shareholders, Tim Cook — March 19, 2012 20:57 — 0 Comments
Shareholders finally given a bite of the Apple
Cash rich Apple today announced it was giving back $10 billion to shareholders - the first time it has paid a dividend since 1995.
Tim Cook, the company’s new chief executive, is expected to initiate a quarterly dividend of $2.65 a share sometime in July of this year, Apple said Monday in a statement.
“We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure,” said Cook. “Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program.”
The $10bn (£6.3bn) that the world’s biggest company intends to distribute every year sounds impressive but, at the current share price of about $600, the implied dividend yield is just 1.77%, pretty miserable, says Nils Pratley, the Guardian’s financial writer. Indeed, don’t be dazzled by $10bn. Vodafone will pay slightly more (£6.7bn) this year, albeit with the help of a £2bn ‘special’ contribution from payments from Verizon Wireless, the US mobile phone firm where it owns 45%.
He continues: The extraordinary thing is how Apple got away for so long without paying a dividend. Or, at least, it’s amazing to UK eyes. In the UK, clinging on to shareholders’ cash unnecessarily is almost regarded as an act of treason. If companies have an embarrassment of riches, their duty is clear – hand over the lolly so the owners can decide where they wish to invest their winnings. It’s called imposing discipline on managements.
Read more on this story at the Guardian website: