In response to Apple’s (AAPL) annual shareholder meeting yesterday, at which CEO Tim Cook reportedly told investors he and the board were “actively thinking about” what to do with excess cash, Sterne Agee’s Shaw Wu today writes “we are encouraged by CEO Tim Cook�s commentary that AAPL has more than sufficient capital in running the company and is thinking �very deeply� in managing its growing cash position.”
Wu thinks that paying a dividend “makes a lot of sense,” especially given the number of funds that are “focused on delivering yields and stocks that pay dividends.”
Wu lays out the case:
We estimate and believe a yield in the 2%-3% range makes sense and would be very attractive for shareholders including employees. The reason is that the company�s strong cash flow should be able to fund this (which we estimate could be $75-$80 billion in the next four quarters vs. the $45.3 billion we estimate the company generated in the last four quarters).
Wu maintains a Buy rating on Apple shares and a $550 price target.
Apple shares today are up $5.96, or 1%, at $522.35.
Fin
No comments:
Post a Comment