This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

3 Reasons Why Apple Shouldn't Pay a Dividend

Return on Equity

Apple has a return on equity (ROE) of 41.67% according to Yahoo! Finance, highlighting the company's massive profitability. It means that of every dollar Apple invests, it earns 41.67 cents in profit.

Other tech heavyweights pale in comparison to Apple's impressive ROE. Google (GOOG - Get Report), for example, has an ROE of just 18.66%, while Research In Motion (RIMM), and HP (HPQ - Get Report) come in at 21.43% and 17.73%, respectively.

One theory behind paying a dividend, of course, is that the company cannot find a better use for its cash, and as such, must return it to shareholders. This, however, is not the case at Apple.

Ironfire Capital's Eric Jackson said Apple has had a "phenomenal" return on its research and development dollars, especially when compared to software behemoth Microsoft (MSFT - Get Report). "I think Apple could make the argument that a high ROE is its way of saying it knows what is best for its cash." Jackson is long shares of Apple.
2 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $122.37 0.00%
GOOG $632.59 0.00%
HPQ $30.62 0.00%
MSFT $46.88 0.00%
FB $95.21 0.00%

Markets

Chart of I:DJI
DOW 17,745.98 -5.41 -0.03%
S&P 500 2,108.63 +0.06 0.00%
NASDAQ 5,128.7850 +17.0520 0.33%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs