Apple Inc. (AAPL) Has No Choice

We can’t do nothing
The only thing that Apple can’t do is nothing, since it should be painfully obvious that an investor revolt is happening as we speak.

Not only are growth investors dumping their stakes as they question where future iPhone growth will come from, but also Apple’s yield isn’t generous enough to attract value investors en masse. Most of those types of investors still prefer the comfortable 4.4% and 3.3% yields of Intel and Microsoft Corporation (NASDAQ:MSFT), respectively, despite their questionable growth prospects.

While Einhorn’s frivolous lawsuit is certainly a distraction and arguably part of a broader ploy to catalyze action, it serves as evidence that the status quo of conservative payouts and cash hoarding is no longer acceptable.

Apple certainly faces some challenges with how to increase its dividend, as most of that money is overseas, but rest assured it will start giving more back to shareholders. It has to.

The article Apple Has No Choice originally appeared on Fool.com and is written by Evan Niu, CFA.

Fool contributor Evan Niu, CFA, owns shares of Apple, Verizon Communications, and Qualcomm. The Motley Fool recommends Amazon.com, Apple, and Intel. The Motley Fool owns shares of Amazon.com, Apple, Intel, Microsoft, and Qualcomm.

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