Apple to pay $2.65/share dividend, buy back $10B stock - USA TODAY

NEW YORK (AP) – Apple is finally putting its pile of cash to work, introducing a quarterly dividend of $2.65 per share and starting a $10 billion share buyback program.

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Apple has a market capitalization of $545 billion and is the world's most valuable publicly traded company.

Getty Images file

Apple has a market capitalization of $545 billion and is the world's most valuable publicly traded company.

Apple (AAPL), the world's most valuable publicly traded company, says the dividend will start in its fiscal fourth quarter, which begins July 1. The buybacks by Apple, which has a market capitalization of $545 billion, will begin in its next fiscal year, which starts Sept. 30.

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 like Microsoft (MSFT), currently at 2.5%, and Hewlett-Packard (HPQ), at 2%.

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's 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 is discussing the decision on a conference call this morning.

Apple shares have risen 37% since research firm Oppenheimer said on Jan. 24 that Apple's board was in "active" discussions about the use of cash. In pre-market trading, the shares rose $4.96, or 1%, from Friday's close to $590.53. Just before the announcement, the shares were above $600.

The dividend opens up ownership of Apple shares to a wider range of funds. Many "value-oriented" funds are not allowed to buy stocks that don't pay dividends.

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