AAPL has been hitting new highs just about every day. Yesterday the stock price hit an intra-day high of $230.20, a lofty height indeed. We pointed out earlier that Apple now has the fourth largest market cap of any publicly traded domestic company, so maybe it's time to revisit the question of Apple declaring dividends on its stock.
Apple has not declared a dividend since December of 1995. After the last shareholder meeting, Steve Jobs stated that the money was best left in the bank so there would be no question of loans if something big was to be bought. "The cash in the bank gives us tremendous flexibility," explained Steve.
The Motley Fool makes an interesting case in favor of dividends. Apple has no history of massive acquisitions, and keeping $40 billion around for just that reason sounds less than reasonable. A case is also made for keeping the money as preparation for the next big recession. This doesn't seem to hold much water, however, since analysts predict that Apple will grow by 18% per year for the next five years. That should provide more than enough cash, predicting that Apple will report net income of around $21 billion in 2014.
Of course, predictions are often wrong, but Apple has been excellent when it comes to beating expected earnings numbers for some time. 77% of informal Motley Fool poll respondents think that Apple should declare dividends. After all, that cash is really owned by the stockholders and it seems that a good number of them would like to get some of it back.
Read on for another view.