To Dividend Or Not To Dividend?

| Apple Stock Watch

What to do with all that money? That’s the question facing Apple after it revealed its piggy bank was close to US$100 billion. CFO Peter Oppenheimer said the company is “actively discussing” how to use that money, which renewed the call for a dividend among many investors and analysts. Apple’s hoard exceeds the market value of all but 26 firms in the Standard & Poor’s 500 index.

The San Francisco Chronicle quoted David Rolfe, chief investment officer of Wedgewood Partners Inc., as saying: “They have turned into the First National Bank of Cupertino. Common sense dictates that they don’t need a cash hoard of $150 billion.” He was referring to his estimate that Apple’s holdings could reach $150 billion by the end of 2012. Mr. Wolfe’s firm manages Apple stock among its $1.3 billion in assets.

Brian White, an analyst at Ticonderoga Securities LLC, echoed Mr. Rolfe’s call for an AAPL dividend, saying: “It’s going to be a gusher when they tap into that thing. It’s like tapping into an oil field out in Texas.”

However, not everyone agrees with the call for a divided. The Chronicle spoke with Trip Chowdhry, an analyst at Redwood City’s Global Equities Research, who felt that Apple should hold onto its cash for “giant growth opportunities” and said: “If Apple declares a dividend, it would be an indication to me that it’s time to get out of the stock.”

Sign Up for the Newsletter

Join the TMO Express Daily Newsletter to get the latest Mac headlines in your e-mail every weekday.

No Comments

Log-in to comment