Apple (AAPL) Could Pay 5% Dividend (Analyst)
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Price: $333.74 +0.14%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 0.4%
EPS Growth %: +20.4%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 0.4%
EPS Growth %: +20.4%
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According to a report from Sanford C. Bernstein analyst Toni Sacconaghi, Apple Inc. (NASDAQ: AAPL) could pay a dividend of 5 percent and still hold a growing balance, as the company hangs on to more than $50 billion in cash.
Apple posted a record fourth-quarter on Monday and shares of the tech giant are up 46 percent year-to-date, accounting for 21 percent of the Nasdaq 100 Index.
“There’s clearly a limit to how much cash any company needs,” Sacconaghi said.
"What we would like to see is Apple start to return some of that cash in the form of share repurchases or, more preferably, in the form of an ongoing dividend. The certainty and the discipline of having to pay a divided is highly attractive.”
Investors worry about Apple making a wrong move in the acquisitions market, Sacconaghi noted.
“There are investors who have dividend mandates who also can’t own Apple, and so for a lot of different reasons it’s something Apple ought to consider seriously.”
Apple generates about $20 billion per year in cash, and the total could swell to $100 billion in 2012 if the company sits on it.
Shares of Apple closed Friday down $2.05 to $307.47.
Apple posted a record fourth-quarter on Monday and shares of the tech giant are up 46 percent year-to-date, accounting for 21 percent of the Nasdaq 100 Index.
“There’s clearly a limit to how much cash any company needs,” Sacconaghi said.
"What we would like to see is Apple start to return some of that cash in the form of share repurchases or, more preferably, in the form of an ongoing dividend. The certainty and the discipline of having to pay a divided is highly attractive.”
Investors worry about Apple making a wrong move in the acquisitions market, Sacconaghi noted.
“There are investors who have dividend mandates who also can’t own Apple, and so for a lot of different reasons it’s something Apple ought to consider seriously.”
Apple generates about $20 billion per year in cash, and the total could swell to $100 billion in 2012 if the company sits on it.
Shares of Apple closed Friday down $2.05 to $307.47.
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