4 ms·

Apple doesn't pay a dividend...

• tsuraan 18y ago
  This brings up something that's been bothering me for a while: how does MS's dividend make anybody want to buy their stock? IIRC, MS pays a $0.11 dividend per $22 share (price as of this morning). I'm not very familiar with things relating to stocks, but that looks like an interest rate of 0.5%. My checking account does better than that, so why would anybody care at all about a dividend that is so low?
  • taw 18y ago
    Value of stock comes from a combination of dividend and expected raise in their price, analyzing just half of it will grossly underestimate its value.
  • kirse 18y ago
    That's a quarterly dividend, so if you automatically re-invest dividends thats .5% compounded 4x during a year. If you're investing in stocks, you're usually not thinking that the dividend will be your greatest return. Dividends usually indicate one of two things - 1) the company is healthy and profitable 2) the company has a massive cash pile. In the case of Microsoft it was both, but primarily the mountain of cash they used to have (>$60bn) that got investors complaining that MS do something with the cash mountain. MS would easily have more cash than Apple if they didn't put in the effort to get rid of it over the past 5 years or so.