Earlier this year, when Microsoft (NASDAQ:MSFT) declared its first-ever dividend and thus ended decades of yield-free living, investors assumed that other cash hoarders would follow suit. President Bush even gave dividends a fresh coat of tax-advantaged paint. Surely, it was just a matter of time before blue-chip tech companies and other corporate tightwads began paying out.
We're still waiting.
Even so, you have to believe that as renewed market optimism makes cheap acquisitions less likely and low interest rates render cash and short-term investments unattractive, more companies will pull a Microsoft and dispense quarterly or annual dividends.
Here are some prime candidates:
Apple (NASDAQ:AAPL): Lugging around $4.5 billion may have made sense when its stock was languishing and its prospects dim, but now the market's loving Apple again. Why not cut shareholders in on the action?
Sun Microsystems (NASDAQ:SUNW): Despite $2.6 billion in cash and short-term investments to go along with $2.9 billion in less liquid long-term investments, Sun still languishes sub-$5. Why not at least make the stock attractive for income investors?
Oracle (NASDAQ:ORCL): His ego is as big as the stock's yield is small, but CEO Larry Ellison may yet give up some of Oracle's $6.5 billion war chest.
Want more? How about Cisco (NASDAQ:CSCO), Dell (NASDAQ:DELL), Yahoo! (NASDAQ:YHOO), or EMC (NYSE:EMC)? All are packing more than $1 billion in cash and investments on their balance sheets. Discount brokers E*Trade (NYSE:ET) and Ameritrade (NASDAQ:AMTD) are likewise in a position to begin kicking out some yield. Finally, BMC Software (NYSE:BMC) may be struggling at the moment, but that coffer of green looks ripe for the piñata treatment.
Too much idle cash can send the wrong message -- especially when it can be better invested in the company's business or used to buy back stock. If not, send it over to the folks who will do something with it. You know, like investors who will reinvest those payouts, even if that means buying more shares.
Are cash-rich companies that refuse to pay dividends a blessing or a curse? Is the time ripe to initiate new payout policies? Is an ex-dividend like an ex-girlfriend? All this and more -- in the Investing for Income discussion board. Only on Fool.com.
