Apple to reward investors with dividends, stock buybacks
20 Mar 2012
Apple announced yesterday that it would start the process of liquidating its cash pile to shareholders by way of dividends and stock buybacks, at a cost over $10 billion a year over the next three years. However, the company is raking in such colossal amounts of cash - $1 billion a week in the last holiday season alone - that the move would hardly make much of a difference to the company's overflowing coffers.
Apple's decision to pay the dividend, though much awaited, came as an extraordinary one for a company that, despite its age, has been growing more like a start-up.
While paying dividends is mostly associated with cash-rich companies no longer seeing big growth opportunities to invest in, Apple, founded in 1976, has yet to reach that level of maturity.
It continues to come out with new tech hits like the iPhone and iPad, and its sales in the recent holiday quarter were up 73 per cent from the period in 2010, which in turn, was 70 per cent higher than the holiday 2009 quarter.
Yesterday, Apple said, it had sold 3 million of its new iPads since their introduction last Friday.
Apple's cash was up at around $100 billion at the end of last year, a level which many investors find increasingly unjustifiable considering the paltry amount Apple'e earnings on the money are estimated at less than 1 per cent. Apple's cash figure stands at around twice the cash balance of the company holding the next biggest cashpile, Microsoft.
