Apple is poised to boost its dividend by more than half, according to analysts surveyed by Bloomberg, providing investors hit by its slumping share price with one of the highest yields in the U.S. technology industry.
Apple will probably lift its quarterly dividend 56 percent to $4.14 a share, for an annual payout of $15.7 billion, according to the average estimate from six analysts. The resulting yield of 3.6 percent would be higher than 84 percent of the companies in the S&P 500 Index paying dividends. Apple could fund a payout with existing cash flow without using profit from overseas, which can be subject to extra taxes, said Gene Munster, an analyst at Piper Jaffray.Chief Executive Officer Tim Cook, who a year ago this month reinstated a dividend and announced a $10 billion buyback, faces mounting pressure to take bolder steps to pay out more of Apple's $137.1 billion in cash and investments. Investors including David Einhorn's Greenlight Capital are pushing for more money as growth slows and competition from rivals such as Samsung intensifies."The accumulation of cash has become excessive," said Brian White, an analyst at New York-based Topeka Capital Markets. "It doesn't matter which bearish scenario you forecast, they're never going to need this much cash."Apple rose 2.7 percent to $455.72 on Monday. The stock has declined 35 percent from a Sept. 19 peak, compared with a 6.2 percent gain for the S&P 500.Many companies announce dividend changes once a year, fueling speculation about Cook's plans as Apple approaches the anniversary of last year's announcement.Have more to add? News tip? Tell us
