“Though Apple’s $137 billion cash hoard receives all the attention, Apple’s earning power is really driving the company’s need to increase its dividend,” Sparks writes. “But even if Apple doubles its dividend tomorrow, the company still runs into a fortunate cash problem.”
Sparks writes, “Less than a year ago, Apple announced a plan to return $45 billion to shareholders in the form of dividends and a share repurchase program. Already, the company has returned $10 billion. But with $23 billion in cash flow from operations in Apple’s first quarter alone, investors are eager for a larger payout. In fact, a Feb. 7 statement by Apple asserted that ‘Apple’s management team and Board of Directors have been in active discussions about returning additional cash to shareholders.’ …Apple’s ‘active discussions’ will lead to action. But whether or not this action will occur on Wednesday or not is still up in the air. Even so, the all-important questions regarding the details still remain: What exactly will Apple do? In what way will it return cash to shareholders? How much? We’ll likely know more tomorrow.”
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