12:35pm (EST)
After 17 years of waiting, Apple (AAPL, $598.36, up $12.79) has finally decided to pay a dividend to its shareholders again. The company announced plans to initiate a quarterly dividend of $2.65 a share which should be payable sometime in the fourth quarter. Additionally, Apple said it will buy back some of its shares after announcing a $10 billion share repurchase program, also commencing later this year.
Apple’s CEO, Tim Cook said, “We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure. You’ll see more of all of these in the future”.
As far as a stock-split, no dice. We have talked about why companies SHOULD do stock-splits but Apple said it has no plans to do one any time soon. As a covered call investment, Apple would cost about $60,000 just to buy 100 shares which is the minimum needed to write options on. So, when we hear the arguments that stock-splits don’t matter, they do in some ways if you are trying to invest in a stock and write options on your investment.
The news has helped lift the Tech sector and the market in general.
The Dow is up 19 points to 13,251 while the S&P is higher by 6 points to 1,410. The Nasdaq is showing a 23 point pop and is at 3,078.
We still have a dozen or so trades that are open and they are adding to last week’s gains, so, we have to cut things short as we go check on our trades. One of our current trades from Friday is up 33% so we are going to lock-in HALF profits now. Subscribers, hit the Members Area for the updates.