Apple Inc. (AAPL) Prepares to Hand Out Historic First Dividend

Apple Inc. (NASDAQ:AAPL) was not exactly known for generosity toward shareholders before, as late CEO Steve Jobs preferred to always have a large stockpile of cash on hand at headquarters. But now that CEO Tim Cook is in charge of the tech giant, the mood has shifted. The company reached out to its investors recently to get their feedback, and Thursday history will be made when Apple distributes its first-ever dividend.

Apple Inc. (NASDAQ:AAPL)

Granted, compared to an Apple Inc. (NASDAQ:AAPL) stock price of $630, a $2.65 dividend per share is very small, but the step for Apple to give out some of its massive $100 billion cash pile to investors is noteworthy in its own right. Of course, the cash reserves would deplete pretty quickly if Apple has too many more quarterly reports that are as disappointing as the most recent one, but since the company has only missed two reports in the last 10 years, that seems pretty unlikely.

The dividend idea came about as Cook solicited and received feedback after starting a $10 billion stock buyback program in March. Though the dividend is pretty paltry, the expectation that Apple Inc. (NASDAQ:AAPL) stock will bounce right back toware record highs may not necessarily be in the cards. Patience will be the virtue of the day for investors.

“The fact that they had a disappointing quarter doesn’t change things much because the dividend is still relatively small as compared with the company’s current cash balance,” said Dave Denis, professor of business at the University of Pittsburgh. “The dividend is still a big deal, though, in that the company is implicitly committing to continue the payment of this dividend in the future. That will gradually reduce the company’s cash balance over time if operating profits continue to be disappointing.”

With all of the buzz and hype about Apple Inc. (NASDAQ:AAPL) and its impending release of the iPhone 5 (and rumors of other devices as well to go with the new iOS 6), would even a record-breaking launch period be considered disappointing? For those major investors in Apple, Inc. (NASDAQ:AAPL) – including hedge funds like David Einhorn’s Greenlight Capital, which had an $877 million position in Apple stock at the end of March – nearly 16 percent of a multi-billion-dollar portfolio – the answer would probably be “no.”

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!