The discussion around what Apple Inc. (NASDAQ:AAPL) is going to do with nearly $200 billion U.S. of cash and cash-like securities on the company’s balance sheet is an interesting one. With many opportunities for growth, Apple could indeed choose to reinvest this capital into its business to develop new products or services or acquire other companies that supplement or complement Apple’s overall business. In this article, I’m going to discuss the potential dividend impact this could have for investors.
Apple has paid a dividend for quite some time and has traditionally paid a relatively small dividend yield. This is partly due to a share price that has been on a parabolic upward trajectory for long-term investors, certainly a good thing from a capital appreciation perspective. Apple continues to raise its dividend in a meaningful way, and pays a dividend yield which is certainly better than what one may otherwise get with long dated government bonds, but with so much cash on its balance sheet, some have indicated the opportunity for a special dividend persists and is likely.
I do think Apple is likely to continue to dish out special dividends as a way of returning value to its shareholders, as likely to do so over the long run in times like this when the companies cash pile grows to such a level. Apple’s dividend is one small reason to own the stock but should certainly not be ignored by investors.
Invest wisely, my friends.