Apple’s announcement of a quarterly dividend and share buyback program helped goose the company’s stock on Monday, sending it to an all-time closing high of US$601.10, a gain of $15.53 (+2.65%), on heavy volume of 31.7 million shares trading hands. AAPL also hit a new intra-day high of $601.77. Its closing high gives Apple a market capitalization of $560.4 billion.
The Mac, iPhone, and iPad maker announced a quarterly dividend of $2.65 per share that will begin at some point in the September quarter, Apple’s 4th fiscal quarter. The company will also begin a $10 billion stock buyback program that will be executed over three years. That program will begin in fiscal 2013.
Analysts who were largely positive on the news, with many having expected Apple to begin a dividend sometime in 2012.
“With plans to return at least $45B to shareholders in the next 3 years, we believe this enables dividend-focused investors to invest in Apple shares, potentially increasing the shareholder base,” Michael T. Walkley of Canaccord Genuity said in a research note to clients obtained by The Mac Observer.
Maynard Um of UBS was a tad more circumspect, telling his clients that, “We expect dividend initiation to attract new fund flows into the stock, but as we highlight in our dividend report 2/2/2012, stock reaction to dividends from technology companies has historically been modest (in line with today’s share reaction).”
He reiterated the position he laid out twice on Friday that the next iPhone refresh represents the biggest catalyst for growth in Apple’s stock in 2015.
He also noted that he believes Apple, “can fund its programs wholly on its cash flow, leaving a US cash ‘war chest’ untouched. Hence, we believe the likelihood for a future dividend increase is high.”
All three major indices closed higher on Monday, and the markets enjoyed a broad, though small, rally.
*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.