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An Apple (AAPL) Special Dividend? Not Very Likely, Analysts Say

December 11, 2012 7:15 AM EST Send to a Friend
Mentioned earlier in December, Apple, Inc. (Nasdaq: AAPL) is unlikely to pay a special dividend out to investors before the end of 2012. And the reason isn't because it doesn't have the wherewithal.

Current data points to Apple holding about 70 percent of its $121.3 billion in cash in overseas accounts. Instead, Apple will focus more on growing its quarterly dividend. Currently at $2.64 per share, yield on Apple's dividend has crept up to the 2 percent level as the stock has continued to show some weakness.

Analyst Brian White, of Topeka Capital, say that it isn't how Apple operates. "They won’t be driven by some transactional event - it’s just not their style to try to game taxes or game the market," he noted.

One analyst from Mizuho Securities thinks Apple is more likely to grow the dividend by 10 percent, though a specific time frame wasn't given.

Apple has never been known as a dividend stock and may still not be known as one given the sub-3 percent yield. A 10 percent boost to the dividend would push current yield up to 2.2 percent.

Many peers have been issuing special dividends ahead of the fiscal cliff, which will see federal dividend tax rates rise from the current level of 15 percent, up to a less-fun rate of 43.4 percent at maxima.

Reinstated over the summer, Apple's dividend and $10 billion stock buyback plan will cost the company about $45 billion over three years, or just over the $36 billion in cash the company holds domestically.

Apple is indicated for a higher open Tuesday.




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