Ahead of U.S. tax hikes, Apple not seen paying special dividend with nearly 70% of its cash overseas

“Apple Inc. (AAPL) ’s ability to pay a special dividend, viewed by investors as unlikely, is limited because almost 70 percent of its cash is outside the U.S.,” Adam Satariano reports for Bloomberg.

“While dozens of companies are paying special one-time dividends ahead of a potential jump in taxes, Apple probably won’t join in partly because so much of its $121.3 billion in cash is held overseas, according to analysts,” Satariano reports. “Apple is likely to focus on boosting its quarterly $2.65-a-share dividend, said Brian White of Topeka Capital Markets Inc.”

Satariano reports, “Oracle Corp. (ORCL), Wal-Mart Stores Inc. (WMT), Costco Wholesale Corp. (COST) and at least three dozen other companies have announced special dividends this quarter, according to data compiled by Bloomberg. The payouts come ahead of a potential rise in the top federal tax rate on dividends to 43.4 percent from 15 percent next year as part of the so-called fiscal cliff, a blend of tax increases and spending cuts that will take effect if U.S. lawmakers don’t forge a budget deal.”

“White’s comments matched those of Wall Street analysts such as Chris Whitmore of Deutsche Bank AG. Instead of the special dividend, investors can expect Apple to increase its current payout by at least 10 percent, said Abhey Lamba, an analyst with Mizuho Securities USA,” Satariano reports. “Even while distributing more cash to investors, Apple will continue to add to its cash reserves, with its balance sheet reaching $250 billion by the end of 2015, White said. ‘This is a cash gusher,’ White said.”

Read more in the full article here.


      1. Actually, capital gains taxes going from 15% to 43.4% is what’s excessive.

        Shareholders gaining access to their money ahead of a scheme that’s proven to have failed to generate revenue – and actually decreased revenue – multiple times in history is not excessive. Insanity doing the same thing over and over again and expecting different results. Obama is insane.

        Apple is owned by its shareholders. That is Apple shareholders’ money. Apple is simply wasting shareholders’ money on Big Gov’t that will flush it down the toilet by the trillions as they always have and always will. Government is not the answer. Government is the problem.

        What’s your final goal, Dem/Lib/Progs? Make everyone “equal” by making everyone poor, on foodstamps, and dependent on government handouts? That’s some vision. Getting government off the backs of its citizens is what will unleash a new tidal wave of American prosperity. Until then, there will be nothing but pain.

        There isn’t enough money on earth to construct the statist utopia you think you want. You’ll see soon enough. I’m just sitting back laughing, watching you dunces create the perfect conditions for The Second Coming of Ronald Reagan.

        The U.S. voted for its pain. I say let the country have what it wants for now. We’ll come clean up the Dem/Lib/Prog’s mess soon enough, as always.

    1. I see on the news that several countries and maybe parts of some states may be up for sale.

      As for buying media companies, that would be never ending. Apple’s service needs to be more like a cloud based DVR. Manufacturers of VCR tapes and boxes did not need to negotiate recording shows for viewing later from any VCR in any location on the planet. The same goes for audio tapes and CD’s. You would not even need to have a cable to your house. Just let Apple record the broadcast one time for any time SIRI asks for it! Just pay the source to be a member.

      “Think Different” Think global!

  1. One thing to consider with the capital tax increase is that Apple shareholders who have held stock for at least 3 years would have seen the stock triple in value at a minimum. Therefore 66% of the value is subject to the tax. Those with large holdings will certainly see significant sums being paid as tax after the changes in the tax code.
    That is certainly a big incentive to sell out now and buy back in in January.

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