"In the end, we think the chances are slim that Google undertakes a massive transaction or multiple mid-size acquisitions that would consume a large portion of the $100 billion plus cash balance we expect it to reach in late 2015 or 2016. We think we will see a buyback or dividend instead," Kirjner concluded.
Of course, Google likely will figure out a way to return money to shareholders in a way that avoids the U.S. tax man.
While Apple CEO Tim Cook was dragged in front of the Senate Permanent Subcommittee on Investigations earlier this week to explain it's supposed 14% tax rate and a heavy use of Irish tax shelters to store tens of billions in profits, Google may be an even more blatant avoider of U.S. taxes.
The company was able to beat its most recent quarterly earnings forecasts because of an income tax rate that fell to the
, according to analysts. In the first quarter of 2013, Google reported an income tax rate of just 8%.
Regardless of whether Google follows Apple in conducting a giant return of capital to shareholders -- Apple's $11 billion in annual dividends now is the highest figure in Corporate America -- investors can expect both companies cash stockpiles, particularly those in low tax jurisdictions like Ireland, to grow.
-- Written by Antoine Gara