Will Apple raise its dividend Tuesday?

The logic among analysts seems to be this: the company will go for the increase simply because it can.

By Jim J. Jubak Mar 18, 2013 5:30PM
Tuesday is the anniversary of Apple’s announcement re-instating a dividend after a 17-year hiatus. And that anniversary has sent Wall Street into a dividend-predicting frenzy.

Analysts surveyed by Bloomberg project that Apple (AAPL)will raise its quarterly dividend 56% to $4.14 a share. That would give the stock a 3.7% yield. That would be higher than the yield of 86% of the companies in the Standard & Poor’s 500 that pay dividends.
The logic among analysts seems to be no more complicated than this: Apple will raise its dividend because it can. The projected annual payout of $15.7 billion could be paid from existing cash flow, the argument goes, and Apple would not have to repatriate cash from overseas and trigger higher tax payments.

Other analysts have pointed out that Apple could easily sell debt to raise extra cash. That would let the company increase the dividend and buyback shares. Credit Suisse, for example, figures the company could raise its dividend to 4% in 2013 using its onshore cash, and then borrow to buyback shares. For every $10 billion raised at 2.5%, Credit Suisse calculates, Apple could buy back enough shares to increase earnings per share by 2%.

There’s no doubt some of Apple biggest shareholders would like the company to increase
dividends. A quarterly $3-a-share dividend would mean a total annual payday of $1.6 billion for Apple’s top three institutional investors, BlackRock, Vanguard Group, and Fidelity, Bloomberg calculates.

On this dividend speculation Apple has climbed to $455 as of 3 p.m. New York time Monday, from $420 on March 4 (Apple is a member of my Jubak’s Picks portfolio).

At the time of this writing, Jim Jubak didn't own shares of any companies mentioned in this post in personal portfolios. When in 2010 he started the mutual fund he manages, Jubak Global Equity Fund (JUBAX), he liquidated all his individual stock holdings and put the money into the fund. The fund may or may not own positions in any stock mentioned. The fund did own shares of Apple as of the end of September. For a full list of the stocks in the fund as of the end of the most recent quarter, see the fund's portfolio here
Tags: AAPL
Mar 19, 2013 12:40AM
Tuesday? Which Tuesday? How about Thursday or maybe Friday?
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

120 rated 1
268 rated 2
439 rated 3
709 rated 4
641 rated 5
609 rated 6
640 rated 7
516 rated 8
272 rated 9
152 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.