In his comments today at the Goldman Sachs tech conference in San Francisco, Apple CEO Tim Cook once again addressed the question of what the company might do with its giant cash pile, which totaled $98 billion at the end of December.
On the company's December quarter earnings call, CFO Peter Oppenheimer noted that the company is "actively" discussing what to do with the cash. At the Goldman conference, analyst Bill Shope asked Cook about the position, and Cook inched incrementally closer to suggesting that some resolution on the issue is coming.
Cook notes that despite spending billions on bolstering the supply chain, building retail stores, making acquisitions and building its IT infrastructure, the company clearly has more cash than it needs to run the business on a day-to-day basis. Cook echoed a previous statement that he is not religious about holding cash, or about not holding it. But he repeated Oppenheimer's comment last week that the Apple board is in "very active discussions" on what to do with the cash.
In fact, Cook went one step further, confirming that the subject of how to utilize the cash "is being discussed more now, and in greater detail," now that the total has continued to climb.
As I and others have noted before, the company's options are pretty clear: they can pay a one-time dividend; they can launch regular dividends; they can buy back shares; they can make acquisitions; they can invest in the business. Cook would argue that they already are doing the last two, and there is no track record of the company doing large M&A transactions. So it would appear that this is going to come down to paying dividends or buying back shares; either way there is the potential for whatever decision they make to substantially bolster the stock. In particular, were the company to pay a dividend with a yield at or above the market average, Apple could open up the stock to a whole new class of buyers: income and value investors who only buy dividend paying stocks.
