Apple is set to bolster its dividend by more than half according to analysts polled by Bloomberg. This would give investors one of the highest yields in the US technology industry. Apple’s quarterly dividend will likely to increase 56 percent to $4.14 per share with an annual payout of $15.7 billion.
The resulting yield of 3.7 percent would be higher than 86 percent of firms from the Standard & Poor’s 500 index paying dividends. Apple could get the funds for the payout from its existing cash flow without using profit from overseas that could be subject to additional taxes.
CEO Tim Cook reinstated a dividend last year and announced a $10 billion buyback. He is pressured to a payout with Apple’s $137.1 billion in cash and investments. Investors, such as David Einhorn’s Greenlight Capital, want more money as the company’s growth slows down and competition intensifies.
Apple increased less than 1 percent to $446.45. Since March 15, the stock fell 37 percent from its peak on September 19. The Standard & Poor’s 500 index increased 6.8 percent during the same period.
Companies usually announce dividend changes once a year. This led to speculations regarding Cook’s plans as Apple nears the anniversary of last year’s announcement, which was made March 19, 2012. Cook reinstated dividends after 17 years, which broke a pattern made by co-founder Steve Jobs, who wanted to preserve capital.
Speculations about Apple’s dividend from analysts polled by Bloomberg ranged from $3.31 to $5.30 per share. The company said that it is currently in talks about how to handle the cash and considering a higher dividend or buybacks.
Apple could add around $40 billion to $42 billion to its cash balance in 2013. Analysts still rate Apple a buy. The technology giant will generate around $15 billion of its cash balance in the United States, which means it can pay out the dividends without getting taxes from bringing cash back from outside the US.
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