Apple Preparing to Offer 'Significant' Dividend for Investors Early Next Year?

Bloomberg reports on comments from money manager Howard Ward claiming that Apple is preparing to begin offering a "significant" dividend to its shareholders early next year.

“We’re going to see a dividend announced for Apple at some point in the first half of 2012,” Ward, a money manager who helps oversee about $36.1 billion for Gamco Investors Inc., said in an interview today with “Street Smart” on Bloomberg Television. “That could easily be a 3 percent dividend-yielding stock or even higher.”

Steve Dowling, an Apple spokesman, declined to comment.

The basis of Ward's claim is unclear, but Apple CEO Tim Cook has signaled increased willingness to consider alternative uses for Apple's growing cash hoard.

Apple began offering a quarterly dividend to investors in mid-1987, but canceled it at the end of 1995 as the company foundered. With the return of Steve Jobs, the company was eventually able to turn itself around and become one of the world's largest companies, but has so far been unwilling to offer dividends again, opting instead to hold onto its profits for its own uses.

Apple has argued that its significant cash hoard gives it the ability to make major long-term deals for components at favorable terms, as well as putting the company in a position for a major strategic acquisition should the right opportunity surface. But with Apple's cash and investments now topping $80 billion, calls for the company to return some of that money to shareholders have been on the rise. And if Ward's claim is correct, it appears that Apple under Tim Cook may now agree with that sentiment.

Top Rated Comments

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116 months ago
I don't have any vested interest in AAPL, but I hate it when analysts try to drive up with dividend speculation rather than focusing on fundamentals. I find that irritating. Anyway I thought they were keeping funds on hand to allow them to buy into things which might help the long term interests of the company.
Score: 11 Votes (Like | Disagree)
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116 months ago
That sound you just heard was LTD's heart hitting the floor
Score: 10 Votes (Like | Disagree)
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116 months ago
How does this guy know?

Knowing this for sure would be incredibly valuable proprietary information.
I don't see the upside to Apple for for offering a dividend unless employee shareholders are clamoring for it.
Score: 7 Votes (Like | Disagree)
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116 months ago
Forgive my ignorance, but if these investors are looking for money from a stock that hasn't offered a dividend in 17 years, can't they just sell?

"calls for the company to return some of that money to shareholders have been on the rise"
Score: 7 Votes (Like | Disagree)
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116 months ago

Offering a dividend will do nothing but help bring the stock price up.
Which in turn would make the company more valuable in the long run.


Flat wrong. It actually means that the company has to rely on cash perks to attract shareholders instead of achieving the same goal through market growth and innovation.

Besides, even a one-time distribution of dividends will lead to moral hazard in the sense that investors, from then on, will start factoring that expectation into Apple's stock price as a virtually-mandatory element for buying its shares.

Once more, I hope this is just a stupid speculator's rumor...nothing good can be seen in such a move by Apple.
Score: 6 Votes (Like | Disagree)
Avatar
116 months ago
steve would never allow a dividend.

nev-er.

Apple will be the industry leader for quite some time but if this is true, the culture of Apple is changing. And in the long run, it would be strange if it didn't.

however there are...consequences.
Score: 6 Votes (Like | Disagree)

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