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Will Apple Force Google to Pay Dividend?

Monday, 19 Mar 2012 | 5:22 PM ET

Up and down Wall Street investors are talking about Apple’s decision to return cash to shareholders in the form of a dividend.

At 1.8 percent, the dividend was less than expected and below that of other big technology companies like Microsoft , currently at 2.5 percent, and Hewlett-Packard, at 2 percent.

Nonetheless, Apple has begun to pay a dividend and the move speaks of the pressure on cash-rich companies to return some of that capital.

In fact, the move has led to speculation that other companies may have to follow Apple's lead. Just take a look at the cash some companies have:

Company Cash
Google $44.6
Dell $14.8
Gilead Sciences $9.9
Amazon $9.5
EMC $6.3
Source: S&P

Of all the stocks listed above, the company that most captures the imagination of traders is Google.

“Apple’s dividend puts pressure on Google to keep up,” speculates Mike Murphy. And considering the lofty share price of both Google and Apple, Murphy adds, “it begs the question who will be first to do a stock split.”

Trader Karen Finerman says that although she would like to see Google return cash to shareholders, she doesn't think it will happen. “I don’t know if it forces their hand – they’ve been impervious to cries in the past – but I think they should,” she says.

Colin Gillis of BGC thinks a dividend from Google is unlikely. "They like to acquire," he says. That alone will dissuade the board from parting with their cash.





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Trader disclosure: On Mar 19, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long SPY; Karen Finerman is long IWM; Karen Finerman is long MDX; Karen Finerman is long FRO; Michael Murphy is long ANF; Michael Murphy is long JOYG; Michael Murphy is long SBUX; Michael Murphy is long PHM; Tim Seymour is long INTC, Tim Seymour is long CSCO, Tim Seymour is long YHOO; Tim Seymour is long CSCO; Tim Seymour is long YHOO; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU

For Doug Kass
Doug Kass is short AAPL

For Colin Gillis
No Disclosures


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