Apple to pay dividend, start stock buybacks

Apple is finally using its $98 billion cash stockpile to reward shareholders, saying it’s instituting both a dividend and share buyback program. Investors’ expectation that Apple would soon declare a dividend has already bolstered the stock of the world’s most valuable company, driving its market capitalization to about $546 billion. Apple announced this morning that it will pay a quarterly dividend of $2.65 per share, starting in its fiscal fourth quarter, which begins July 1. The dividend works out to $10.60 annually, or a 1.8% yield at the current stock price. That’s below the yield of other big technology companies such as Microsoft, currently at 2.5%, and Hewlett-Packard, at 2%. A $10 billion share buyback program will begin next fiscal year, which starts Sept. 30, and run for three years. Apple is sitting on $97.6 billion in cash and securities. For years, it has resisted calls to reward shareholders with some of that money. Since the death of CEO Steve Jobs, management has signaled that it has been considering options for the money. The dividend will cost Apple about $10 billion annually. That’s less than the cash the company generates, so its cash levels will continue to grow but at a slower rate. Apple CEO Tim Cook and Chief Financial Officer Peter Oppenheimer were to outline more details of the plan this morning.