Site icon MacDailyNews

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.

Exit mobile version