Sterne Agee's Wu Comments Ahead of Apple (AAPL) 9AM ET Call to Discuss Cash Hoard
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Price: $305.93 --0%
Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 12 | New: 19
Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 12 | New: 19
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Sterne Agee's Apple (NASDAQ: AAPL) analyst Shaw Wu weighed in ahead of this morning's 9AM ET conference call to discuss the cash hoard.
Wu believes paying a dividend makes the most sense for the company and views it as a positive catalyst.
"While we find the timing somewhat curious sending out a notice on a Sunday afternoon PT, we nonetheless believe that the topic will likely be around dividends," Wu comments. "As we have said before (see our AAPL notes from 02/10/12 and 02/24/12), we believe paying a dividend makes a lot of sense for both shareholders and employees given the company's high profitability and strong ability to generate free cash flow."
With $97.6 billion in cash currently and an estimated $75-$80 billion in free cash in the next four quarters, the math works for the company to pay a dividend yield in the 2%-2.5% range, the analyst said.
Another reason to pay a dividend is to expand the shareholder base, he said.
Despite the recent run-up, Apple remains a Top Pick. Wu reiterated a Buy rating and $620 price target.
For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.
Shares of Apple closed at $585.57 yesterday.
Wu believes paying a dividend makes the most sense for the company and views it as a positive catalyst.
"While we find the timing somewhat curious sending out a notice on a Sunday afternoon PT, we nonetheless believe that the topic will likely be around dividends," Wu comments. "As we have said before (see our AAPL notes from 02/10/12 and 02/24/12), we believe paying a dividend makes a lot of sense for both shareholders and employees given the company's high profitability and strong ability to generate free cash flow."
With $97.6 billion in cash currently and an estimated $75-$80 billion in free cash in the next four quarters, the math works for the company to pay a dividend yield in the 2%-2.5% range, the analyst said.
Another reason to pay a dividend is to expand the shareholder base, he said.
Despite the recent run-up, Apple remains a Top Pick. Wu reiterated a Buy rating and $620 price target.
For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.
Shares of Apple closed at $585.57 yesterday.
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