Apple to offer 1.8% yield on first dividend in 17 years

It was begged for a long time, but finally it is here. After 17 years without sharing its legendary profits with shareholders, yesterday Apple approved a dividend policy that will pay out 2.65 dollars per share on a quarterly basis for a yield of 1.8% annually. Also, it will announce a share buyback program

Where Apple's surfeit revenues would end up was one of the great unknowns that persisted inside and outside Wall Street. The market demanded that Apple's ability to rake in 97.6 billion euros in profits in 2011 was the moment that the tech company should start to pay a dividend. "It was inevitable that shareholders would demand it," said Javier Flores from Asinver. "What is surprising is the size, which is bigger than expected," Flores added.

Experts estimated that the amount would be around two dollars per share each quarter. According to Bloomberg, Apple ultimately announced that the dividend would be 2.65 dollars. The first payout will take place during Q4 of the 2012 fiscal year (July-September). The 10 billion dollar share buyback offer will begin on September 30, 2012.According to calculations done by analysts at Morgan Stanley, "If Apple pays 35 billion dollars in dividends for the next 13 quarters as predicted and the number of shares is maintained without change, this would imply 3.6% growth in annual dividends during the next three fiscal years."

For now, CEO Tim Cook and Apple plan to pay 10.6 dollars per year, which equates to a 1.8% yield on dividends. But are these figures attractive compared to other companies in the tech sector? On the United States' technology index, the Nasdaq 100, there are about twenty companies offering higher dividends, although they are not all tech companies, technically. Further, we cannot overlook the fact that 25% of the stocks on the index are not offering any sort of payout to shareholders and that the average yield offered by companies paying dividends is situated around 1%.

In general, the market and market experts are valuating the dividend highly. "It is a steep commitment," said Marc Batlle from Elcano. "The dividend in place is generous taking into account the uncertainty intrinsic to tech companies, which are always dependent on launching new products," said the analyst.