Over the past week Apple Computer (AAPL) announced that it will pay dividends for the first time since 1996. Investors will receive $2.65/quarterly distribution starting in the third quarter of 2012. This is positive news for shareholders, as the company was hoarding almost $100 billion in cash on its balance sheet. Otherwise, this stash would have been spent on acquisitions, which might not have benefitted the bottom line by much. After all, the company has been able to go from $6 billion to $108 billion in revenues in a decade mostly as a result of innovation and offering unique products to consumers.
As a dividend growth investor, I do require at least ten years of consecutive dividend increases, before I initiate a position in a company. This is to protect me from investing in companies which have been able to boost distributions based on short-term economic or business events. After all, the Motorla RAZR was once the “cool” phone to have in the mid 2000’s, and the Sony Walkman was the main game in town in the 1980’s for listening to music. While I strongly doubt Apple will be able to increase revenues 20 times over the next decade, if it maintains innovating and delivering to its loyal following of consumers, it should do well.
Other companies in the dividend news include:
Raytheon Company (RTN) , together with its subsidiaries, provides electronics, mission systems integration, and other capabilities in the areas of sensing, effects, and command, control, communications, and intelligence systems, as well as a range of mission support services in the United States and internationally. The company raised its quarterly distributions by 16.30% to 50 cents/share. Raytheon has raised dividends for 8 years in a row. Yield: 3.90%
W. P. Carey & Co. LLC (WPC), together with its subsidiaries, provides long-term sale-leaseback and build-to-suit transactions for companies worldwide and manages a global investment portfolio. The company raised its quarterly distributions to 56.50 cents/share. W. P. Carey & Co. LLC is a dividend achiever has raised dividends for 15 years in a row. The company is planning on converting to a REIT later in 2012, which would lead to a higher annual distribution for shareholders coupled with simplified tax reporting. Yield: 4.90%
Full Disclosure: None
Relevant Articles:
- Dividend Achievers Offer Income Growth and Capital Appreciation
- Dividend Achievers Additions for 2012
- Has the time for Tech Dividends arrived?
- The ten year dividend growth requirement
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