Apple has announced that it will pay a quarterly dividend of $2.65 per share from July and buy back up to $10b of its shares in the FY starting 30th Sept. 2012. Apple will use $45b of its $100b cash pile on this in the next 3 years. But, of course, the cash pile grows and grows all the time.
The dividend I like but I’m less sure about share buybacks. They rarely seem to boost shareholder value. The dividend move will bring many more potential shareholders into the Apple fold although a current yield of c1.8% is hardly that exciting.
Footnote - 9.00pm 19th Mar 12 - Apple closed above $600 ($601 to be precise) for the first time. Up 2.65% on the day.
Footnote - 8.00am 20th Mar 12 - The FT has a great graphic on its front page today which shows that the iPod when launched in 2001 had cost $399. If you had bought Apple shares instead, your investment would now be worth $26,000.
I was still using a Sony Walkman in 2000. Rather than buying a new iPod, if you had invested that $399 in Sony shares in Nov 2000, your investment would now be worth $116. Makes you think, doesn't it!