With Nearly $100 Billion in Cash Reserves, Apple Announces A Dividend And Stock Buyback
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Apple has an enviable problem: The tech giant has too much cash. After months of speculation, Apple’s chief executive Tim Cook has announced that the company will now pay a dividend and buy back $10 billion of its stock.
At a press conference yesterday, Apple chief executive Tim Cook and chief financial officer Peter Oppenheimer announced that the company will issue its first dividend since December 1995, a $2.65 per share quarterly payout from the 1st of July.
Apple has an enviable problem: The tech giant has too much cash. After months of speculation, Apple’s chief executive Tim Cook has announced that the company will now pay a dividend and buy back $10 billion of its stock.
At a press conference yesterday, Apple chief executive Tim Cook and chief financial officer Peter Oppenheimer announced that the company will issue its first dividend since December 1995, a $2.65 per share quarterly payout from the 1st of July.
Related News: Apple’s Biggest Problem? Too Much Cash, Says CEO
In addition, Apple said it plans to buy back up to $10 billion of its shares, an operation that will begin in the 2013 fiscal year.
Through the two operations, Apple said it will spend over $10 billion annually on its dividends, and $45 billion over the next three years in its stock buyback, as it returns part of its $97.8 billion in cash and investments to shareholders.
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However, fund managers expressed disappointment with the dividend announcement, given that the 1.8 percent dividend yield lags behind the average S&P 500, though the figure is largely in-line with the dividends of other tech giants.
Microsoft pays a dividend yield of 2.5 percent, compared with Hewlett-Packard’s 2 percent. In January this year, Intel a dividend yield of 3.03 percent.
Despite the disappointment, investors managed to push Apple’s stock up 2.7 percent to close at $601.10 – a 37 percent gain since the company first hinted in January that a dividend was on that cards.
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Just how much cash is Apple sitting on?
As of the end of December, Apple’s cash and cash equivalents totaled roughly $97.6 billion, more than all but 52 publicly traded companies in the world at the time.
At $97.6 billion, Apple’s cash reserves are sufficient to cover Greece’s debt payments for the next two years.
Related Infographic: Apple’s Cash Can Bailout Greece
In Pictures: American Companies Sitting Atop A Pile Of Cash
