“There has been a lot of talk about Apple possibly issuing a special dividend this month to please investors concerned about the higher taxes associated with the looming fiscal cliff,” Aabha Rathee reports for Wall St. Cheat Sheet. “However, at least one analyst does not believe the iPhone maker will make such a move. Deutsche Bank’s Chris Whitmore wrote in a note to clients on Monday that even though there were arguments to be made in favor of a one-time cash outlay to Appleshareholders, the task actually had little chance of being completed.”
Rathee reports, “‘Despite the wishes of many investors, the probability of a special Apple dividend appears low as we believe the company is more focused on building a track record of predictable dividend growth (vs. one time lump payment) and share buybacks,’ Whitmore wrote, according to Fortune. ‘Although a special dividend would be a big short-term positive development, it appears unlikely at this point in time as special dividends do not tend to have a lasting benefit to shareholders. Irrespective of its near term dividend policy, we think Apple remains attractively valued.'”
“The tax rate on dividends is likely to rise from 15 percent to about 40 percent in January if the changes related to the fiscal cliff are implemented,” Rathee reports. “In reaction, several companies, such as Costco Wholesale, have announced special dividends for shareholders, which will come this month and help the shareholders avoid the higher taxes.”
Read more in the full article here.
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