It seems investors will finally get the answer to one of the biggest questions that had been the talk of Wall Street this year: What is Apple going to do with all that cash?
The company, in an announcement released Sunday evening, said that it will be holding a conference call Monday at 9 am EDT to “announce the outcome of the company’s discussions concerning its cash balance.”
The iPhone and iPad-maker is likely to spend about $14 billion of its $98 billion cash hoard – a record for a public company – to get it a healthy and modest dividend yield in the 2.5 percent area, according to a number of analysts and investors. At Friday’s closing price of 585.57, this would equate to a $3.66 quarterly payout or $14.65 a share for the year.
“We believe a dividend will drive an incremental $4.5 billion in stock purchases (i.e., similar to adding a new top 10 holder) from top 20 dividend mutual funds and ETFs assuming Apple is a new 2.5 percent position,” wrote Brian Marshall of ISI in a note to clients Sunday following the Apple announcement. “We believe Apple could become the highest yielding stock in our coverage universe with a 2.5 percent dividend followed by Hewlett-Packard at 2.0 percent, Cisco at 1.6 percent, IBM at 1.5 percent.”Page 1 of 4 | Next Page