March 19, 2012
In my previous post I discussed the potential of Apple becoming an income stock. Today the company announced that it would begin paying a $2.65 quarterly dividend, a current yield of about 1.8%. Along with the dividend Apple plans to buy back $10 billion of its stock. I believe returning capital to the shareholders is the right move for Apple. They will retain more than enough cash to continue research & development as well as any acquisitions the company might seek. The shareholders are the owners of the company and if management is not putting this excess cash to work, it should return it. As I mentioned in my previous post, a dividend will make for an interesting dynamic as the company now fits the bill for funds/investors who seek current income from their investments. Apple is up nearly 50% year-to-date. I will be interested to see the effects of this fundamental change as time goes on.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).