Apple bites the bullet on divi payouts

APPLE announced yesterday it will pay investors a quarterly dividend of $2.65 per share from July, ending a dry spell for shareholders that has lasted more than 16 years.

Turning his back on Steve Jobs’ firm policy of not paying dividends, Apple boss Tim Cook re-introduced the payout – which will cost $9.88bn a year – alongside a $10bn, three-year share buyback scheme.

Cook (pictured) hinted at Apple’s annual general meeting last month that the board is “thinking about this very deeply”.

But investors could be unimpressed by the stock’s 1.8 per cent yield, which falls short of the S&P 500’s average ratio.

AT&T, the only company with a larger annual dividend bill than Apple (at $10.43bn), offers a yield of 5.6 per cent, while Microsoft pays 2.4 per cent.

The Cupertino-based company ended its last quarter sitting on a $98bn cash pile and has faced increased pressure from shareholders to start divvying out funds.

The dividend and share buyback programme will use about $45bn of the company’s spare cash over the next three years – but the iPhone and iPad maker is expected to rake in more cash at a faster rate.

Apple will fund the payouts from its domestic cash pile, as tucking into its $65bn of overseas funds would incur a hefty tax bill.

Some have questioned whether Apple has resorted to a dividend due to a lack of other ideas for its monumental spare cash pile. But Cook assured investors: “We are innovating at an incredible pace and building a tremendous ecosystem.” He added sales of the new iPad led to a “record weekend”.

Shares rose 2.7 per cent to $601.10.