Apple (AAPL) will likely raise its quarterly dividends by 56% to $4.14 a share per quarter, or $16.56 per year, Bloomberg reports, quoting a survey of analysts.
The iPhone maker currently pays $2.65 a share per quarter that comes to $2.5 billion per quarter, or $10 billion a year, in cash dividends to investors. With an annual payout of $15.7 bln – the resulting yield of 3.7% would be one of the highest in the tech industry. Apple’s current $10 bln payout per year puts the tech giant in the top 5% of dividend allotments in the U.S.
Citing Piper Jaffray’s Gene Munster, Bloomberg notes that Apple could fund a $3.9 billion payout with existing cash flow without using profit from overseas, which can be subject to extra taxes.
Apple has more than $137 billion in cash. Only 30% of that amount is in the U.S.
“The accumulation of cash has become excessive,” said Topeka Capital’s Brian White who rates AAPL a ‘Buy’, with an $888 price target. “It doesn’t matter which bearish scenario you forecast, they’re never going to need this much cash.”
Steve Dowling, a spokesman for Cupertino, California-based Apple, declined to comment on the company’s plans for the dividend program.
At $443 per share, AAPL remains off nearly 17% on the year and 37% from its all-time high of $705 set in September.
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