Investing
Would an Apple Dividend Hike Fend Off Einhorn?
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The latest speculation about Apple Inc.’s (NASDAQ: AAPL) financial plans is that it will raise its dividend. That may be a way to fend off activist investor David Einhorn, who wants the company to create more “shareholder value.”
“While trying to extract information from AAPL (Apple) management is like squeezing ‘water from a rock,’ we did speak with AAPL CFO (Peter Oppenheimer) this past Friday and found the conversation helpful,” wrote ISI analyst Brian Marshall in a note to clients Sunday. “We touched upon a variety of topics, including capital allocation framework.”
After speaking with Oppenheimer, ISI’s Marshall recommended back to the company in Sunday’s report that it increases its current 3-year allocation plan amount to $60 billion from $45 billion. His plan, which would use 50 percent of the firm’s annual free cash flow, puts two-thirds of the cash toward a dividend and the rest to buy back shares.
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