A famous dividend non-payer, Apple, along with Google (GOOG), was one of a handful of large-cap names eschewing payments. Microsoft (MSFT), for example, reversed its dividend stance and made its first payment in 2003, while Cisco (CSCO) announced its first-ever cash dividend last year.
Apple's quarterly dividend yield works out to 1.77% based on the company's current share price. Microsoft's yield is 2.51%, while Cisco's is 1.58%, and tech giants IBM (IBM) and HP (HPQ) offer yields of 1.47% and 1.99%, respectively.Tech stocks, however, lag way behind telecom firms AT&T (T) and Verizon (VZ) in terms of dividend yield. AT&T's is 5.57% and Verizon's is 5.06%. Not that Apple investors were too surprised by the dividend yield. "The dividend is about in the range we expected," noted Michael Yoshikami, CEO and founder of Destination Wealth Management, in an email to TheStreet. "While some had speculated that the percentage might be higher, we believed management would be cautious in declaring an amount." "[Monday's Apple announcement was] largely expected -- I was hoping they would be bolder, but was not expecting it," said Chad Brand, president of Peridot Capital Management and author of the Peridot Capitalist blog. "Instead, they did what most people thought in terms of the dividend (1% to 2% yield), and the buyback is merely to offset dilution from stock options and grants." Brand said Apple's plan to return $45 billion to shareholders over the next three years could have been more ambitious. "Apple generated $40 billion of excess cash in 2011," he wrote in an email to TheStreet. "Assume that figure stays level for 2012 to 2014 (even though it should rise nicely) and over the next three years Apple generates $120 billion of free cash." "The math is pretty simple -- the cash hoard will keep rising dramatically, even with this announcement," he said. "By year-end 2014, they will have $175 billion of cash, assuming no growth in earnings (and therefore no increase in the dividend)."
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