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

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

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

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!