After more than 15 years without paying quarterly dividends to investors, the long drought may be over for Apple fans on Wall Street. A large Apple investor expects the tech giant will announce a “significant” dividend during the first half of 2012.
“We’re going to see a dividend announced by Apple at some point in the first half of 2012,” Howard Ward, who manages a $36.1 billion fund for Gamco Investors Inc. Interviewed on Bloomberg Television’s “Street Smart” today, Ward suggested the payout “could easily be a 3 percent dividend-yielding stock or even higher.”
Although Apple didn’t comment on the speculation, it might be assumed large investors such as Ward may have an inside track on the Cupertino, Calif. company’s plans. So far, the company has resisted calls to give back some of the $81.6 billion Apple has on hand. In October, CEO Tim Cook argued the company has used the huge pool of cash for strategic investments. Earlier today, a $500 million deal to buy Israeli flash memory maker Anobit was confirmed.
Although Apple provided quarterly dividends between mid-1987 to the end of 1995, the practice ended when the company encountered financial troubles. Those past problems are ancient history. Since 2002, Apple stock rose 53 times as Apple became a dominant figure in smartphones and tablets. When Apple co-founder and CEO Steve Jobs died in October, quiet urgings by investors for a dividend took on a more strident tone.
Bloomberg makes an interesting point that Apple stock jumped 18 percent in 2011 despite a market that awarded companies giving dividends. Although Apple surpassed Microsoft in terms of market value, the Redmond, Wash. software giant outperformed the S&P 500 index. Microsoft has paid dividends since 2003. Apple shares have done wonderfully, boosted by huge demand for wildly popular products. It may be time to reward investors who have stuck with the company through thick-and-thin.