Apple (NASDAQ:AAPL) CEO Tim Cook said Apple is able to maintain a rapid growth when paying a dividend instead of appearing the phenomenon that dividend payout at the price of growth slowdown as its peers. Cook announced Wednesday that Apple will use the funds of $97.6 billion to pay dividends and repurchase stock.
Lee Pinkowitz, associate professor at Georgetown University, said that a mature company has experienced rapid growth phase tends to return shareholders more cash than the funds spent in future product innovation.
One view is that dividend payout means a company admits failure, but Apple is very unique, it has become a ‘victim’ of its success. The company generates money much faster than spending.
Apple grew revenues by 68 percent, in contrast to 2 percent for AT&T and 8 percent for MIcrosoft, while GE decreased its revenues, but all of these companies have carried out dividend payouts.
Apple has been founded more than 30 years and has experienced a rapid growth in recent years after the launches of iPhone and iPad. Since the introduction of the iPhone in January 2007, Apple stock price has increased more than sevenfold. Last year alone, Apple’s capital accumulately added 62 percent.
Apple commanded a market value of more than $600 billion at one time Tuesday as Apple stock price touched $644 per share. Apple’s market capitalization touched the $500 billion just on February 29 this year. Read more about AAPL commanded a market value of more than $600 billion at one time.