“It’s been more than ten months since Apple (AAPL) announced a huge expansion to its capital return plan. Apple hiked the plan to $100 billion, and most of the raise was going to be through share repurchases. Included in the announcement was a 15% hike to the dividend,” Bill Maurer writes for Seeking Alpha. “With nearly a year gone since Apple planted its foot as a capital return powerhouse, it’s now time to look forward to 2014.”
“The three main large cap technology names that rival Apple in terms of dividends are Microsoft (MSFT), Cisco Systems (CSCO), and Intel (INTC). At the moment, these three names all have higher dividend yields than Apple… But remember, Microsoft and Intel have been paying dividends for several years, and Cisco started its dividend about a year and half before Apple restarted its dividend,” Maurer writes. “Apple is behind, but remember, just a few years ago, Apple (and Cisco if you go back even further) had no dividend.”
“As of Monday’s close, Apple’s annual yield trailed Microsoft’s by 65 basis points, Intel’s by 136 basis points, and Cisco’s by 121 basis points. A dividend of $3.50 per quarter at current prices would eliminate more than half of Microsoft’s lead, one quarter of Intel’s lead, and almost 30% of Cisco’s lead,” Maurer writes. “The other way that this makes Apple better is because you are getting shares at a decent valuation currently… Apple is trading at a sizable discount to both Intel and Microsoft, and a comparable valuation to Cisco when Cisco’s earnings are converted to GAAP. An extra 34 basis points in annual yield would make Apple look like an even better investment, especially given the current growth forecast. Apple also has the most powerful buyback of these names at the moment.”
Much more in the full article here.
Apple BOD will make that decosion.
Decision…strong coffee this cold morning…
I like your spelling better.
Wait, so because Microsoft (the company that couldn’t find its way out of a paper bag with a map and a machete) bleeds money, Apple should too?
Genius.
(Look, I’m not against a dividend raise from Apple. I’d accept it if it happened. But to do it because Microsoft throws more money at its shareholders is asinine.)
How much does Goople divy out?
More money for me to buy more Apple products! The upgrade machine continues!
Seeking Alpha: Time for some Eye of Newt.
Because Apple has bought back stock it can increase the dividend without paying out any extra as there are fewer outstanding shares.
Screw the dividends, buy back shares instead.
I want a stock split, give me more share and let the price rise again!
A stock split? You’re kidding, right?
I personally like dividends since it is a good way for me to increase holdings over time with dividend reinvestment. Since my shares are in the 401k there is no tax penalty (yet).
I reviewed my other 401k investments and it was interesting that of the 80% growth I’ve seen at least a third of that is from dividends. So from a regular investor standpoint dividends are a reliable way to increase the worth of your portfolio given the volatility of the market nowadays.