ROUND ROCK, Tex. (TheStreet) -- Dell (DELL) is the latest tech heavyweight to reverse its stance on dividends, announcing plans for a quarterly payment beginning in the third quarter of the current fiscal year.
The no. 2 PC maker expects the initial dividend rate to be 32 cents per share per year, or 8 cents per share quarterly. Based on Dell's Monday closing price of $11.86, the dividend yield would be 2.7%.
|Dell announced its dividend plans after market close on Tuesday.|
"The payment of a quarterly cash dividend to Dell's shareholders adds another element to our disciplined capital allocation strategy," said Brian Gladden, Dell's CFO, in the company's statement.
Investors responded positively to the dividend news. Shares of Dell, which is about to kick off its annual analyst meeting, rose 2.67% to $12.29 in extended trading on Tuesday.A number of big-name tech companies have shifted their position on dividends, most notably Apple (AAPL), which announced plans for a quarterly dividend and $10 billion share repurchase earlier this year. The iPhone maker last paid a dividend in 1995. Cisco (CSCO), another famous dividend non-payer, announced its first-ever cash dividend last year, while Microsoft (MSFT) made its first payment in 2003. Dell expects that through the dividend and share repurchases, it will increase its target range for distribution of capital to shareholders to between 20% and 35% of free cash flow from a prior range of 10% to 30%. At the analyst meeting, CEO Michael Dell also plans tell analysts that the company has executed on its commitment to grow profitability and operating income while expanding its enterprise solutions and services. --Written by James Rogers in New York. Follow @jamesjrogers >To submit a news tip, send an email to: email@example.com. Check out our new tech blog, Tech Trends. Follow TheStreet Tech on your wireless devices.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV