Could it be? Could Apple (Nasdaq: AAPL) be announcing a "significant" dividend sometime soon? Money manager Howard Ward tells Bloomberg he suspects it may be issued as early as next year.
Apple has $81.6 billion in cash and investments on hand. The tech company has increased in net income for years but hasn't paid dividends to shareholders for 15 years, when the company was facing more difficult times.
"We're going to see a dividend announced for Apple at some point in the first half of 2012," says Ward of Gamco Investors in an interview with "Street Smart" on Bloomberg Television. "That could easily be a 3 percent dividend-yielding stock or even higher."
Steve Dowling, an Apple spokesman, declined to comment.
On the topic of its cash holdings, Apple CEO Tim Cook had said in an October 18 conference, "The cash that we do spend, we're doing an extremely good job of it and we're very frugal about using it and using it in the right places."
Could a dividend be considered a "right place" for Apple's growing cash reserves? Or will it continue to hold its profits for its own uses, such as earlier today, when Apple's $500 million deal to buy Israeli flash memory maker Anobit was confirmed.
Investing ideas
Apple might be declaring a dividend, but that's still an uncertainty. Instead, we wanted to focus on companies that are already paying a dividend.
Below, we listed companies with high dividend yields (above 4%). In addition, all of these companies are more profitable than their competitors, based on gross and net profit margins.
These high dividend yield stocks have a track record of being more profitable than their competitors -- does that make their dividend payments more stable?
A word of warning: Very high dividend yields can be a by-product of a falling stock price, and there are often good reasons for a falling stock price, so be careful when analyzing these companies.
Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
1. USA Mobility (Nasdaq: USMO): Provides wireless communications solutions to the health care, government, enterprise, and emergency response sectors in the United States. Dividend yield at 7.17%. TTM gross margin at 66.92% vs. industry average at 61.4%. TTM operating margin at 28.7% vs. industry average at 21.72%. TTM pre-tax margin at 26.51% vs. industry average at 15.34%.
2. Douglas Dynamics (Nasdaq: PLOW): Designs, manufactures, and sells snow and ice control equipment for light trucks in North America. Dividend yield at 5.73%. TTM gross margin at 37.09% vs. industry average at 32.27%. TTM operating margin at 20.99% vs. industry average at 12.67%. TTM pre-tax margin at 15.23% vs. industry average at 10.77%.
3. Exelon (NYSE: EXC): Operates as a utility services holding company in the United States. Dividend yield at 4.99%. TTM gross margin at 29.99% vs. industry average at 27.1%. TTM operating margin at 22.53% vs. industry average at 18.38%. TTM pre-tax margin at 19.63% vs. industry average at 13.89%.
4. PPL (NYSE: PPL): Generates and sells electricity; and delivers natural gas to approximately 5.3 million utility customers primarily in the northeastern and northwestern US. Dividend yield at 4.94%. TTM gross margin at 36.24% vs. industry average at 27.1%. TTM operating margin at 27.79% vs. industry average at 18.38%. TTM pre-tax margin at 18.59% vs. industry average at 13.89%.
5. Public Service Enterprise Group (NYSE: PEG): Operates in the energy industry primarily in the northeastern and mid Atlantic United States. Dividend yield at 4.47%. TTM gross margin at 33.74% vs. industry average at 27.08%. TTM operating margin at 25.2% vs. industry average at 18.08%. TTM pre-tax margin at 20.06% vs. industry average at 13.27%.
6. Microchip Technology (Nasdaq: MCHP): Develops and manufactures semiconductor products for various embedded control applications worldwide. Dividend yield at 4.09%. TTM gross margin at 65.68% vs. industry average at 60.52%. TTM operating margin at 31.25% vs. industry average at 25.39%. TTM pre-tax margin at 29.98% vs. industry average at 24.6%.
7. B&G Foods (NYSE: BGS): Engages in the manufacture, sale, and distribution of shelf-stable foods in the United States, Canada, and Puerto Rico. Dividend yield at 4.03%. TTM gross margin at 34.27% vs. industry average at 33.26%. TTM operating margin at 20.55% vs. industry average at 12.11%. TTM pre-tax margin at 14.57% vs. industry average at 9.54%.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
List compiled by Eben Esterhuizen, CFA. Kapitall's Eben Esterhuizen and Rebecca Lipman do not own any of the shares mentioned above. Profitability data sourced from Yahoo! Finance.
