Last week’s announcement of the iPhone 4S from Apple Inc. (NASDAQ: AAPL) has been followed up with the company’s announcement that it has taken 1 million pre-orders for the new phone in just one day. That surpasses the company’s previous record of 600,000 iPhone 4s on a single day. An investor might be tempted to ask for a piece of the action.
Apple has consistently fought calls for a dividend with the comment that the company needs to keep a pile of cash available for the ubiquitous “strategic opportunities.” But $76 billion in cash and short-term investments? A dividend of, say, 2% certainly wouldn’t break the company and might even attract more investors.
Apple has consistently fought calls for a dividend with the comment that the company needs to keep a pile of cash available for the ubiquitous “strategic opportunities.” But $76 billion in cash and short-term investments? A dividend of, say, 2% certainly wouldn’t break the company and might even attract more investors.
If Apple were to pay a 2% annual dividend, how much would it cost the company? Apple’s share price has risen to nearly $384 this morning and its market cap is $355 billion. The company has 927 million shares outstanding. As a percentage of the company’s market cap, a 2% dividend totals $7.1 billion. As a percentage of its share price, the annual cost to Apple would be $7.11/share. That’s less than 10% of the company’s cash, still leaving the company with a cash hoard of nearly $69 billion. It’s also a huge premium to the other high-tech dividend payers.
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