Pros Underwhelmed by Apple Dividend

Monday, 19 Mar 2012 | 1:21 PM ET

On Monday investors were taking a hard look at Apple after the tech titan announced plans to use its $98 billion cash hoard to pay a dividend and buy back shares.

On the news, bulls sent Apple higher. However, if you’re among those investors buying Apple because it’s now a dividend paying stock, the Fast Money pros think you’ve got it wrong .

Traders Stephen Weiss and Joe Terranova call the dividend 'a side show.' Top hedge fund manager Jeff Keswin calls the dividend a 'policy of appeasement.'

Apple Analyst: Dividend Disappointment?
Discussing whether Apple's dividend was a disappointment, with Toni Sacconaghi, Sanford C. Bernstein senior analyst and Jeff Keswin, Lyrical Partners managing partner.

Analyst Tony Sacconaghi considers it ‘less than meaningful.’

The dividend works out to $10.60 annually, or 1.8 percent of the current stock price. That annual yield — how much the company pays out in dividends compared to its stock price — is below that of other big technology companies like Microsoft , currently at 2.5 percent, and Hewlett-Packard , at 2 percent. "The expectations were for a 2-2.5% dividend,” adds Sacconaghi.

All told the pros are less than impressed.

However, that’s not to say the pros don’t see reason to buy Apple – they do. But they say a long position in Apple should be a play on the company’s growth potential. "Apple should be a play on the company's future," says Weiss. "The dividend is simply, something nice."


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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; Terranova is long VRTS; Terranova is long NXPI; Terranova is long IBM; Terranova is long MCD; Terranova is long CNX; Terranova is long EMC; Terranova is long MSFT; Terranova is long JOY; Terranova is long OXY; Terranova is long LQD; Terranova is long POT; Terranova is long TBT; Terranova is short April Gold futures; Terranova is short May Silver Futures; Weiss is long QCOM; Weiss is long BRCM; Weiss is long SNDK; Weiss is long HPQ; Weiss is long TBF; Weiss is long TBT; Weiss is long HAIN; Weiss is short JCP; Weiss is short AAPL puts

For Brian Kelly
Shelter Harbor Capital is long EXP
Shelter Harbor Capital is long ITB
Shelter Harbor Capital is long USG
Shelter Harbor Capital is long IYR
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Shelter Harbor Capital is long SMH
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For Andrew Wellington
Lyrical Asset Management is long AFL
Lyrical Asset Management is long CAR
Lyrical Asset Management is long DELL

For Christopher Anand
No disclosures

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For Toni Sacconaghi
Mit Shah of Bernstein Research maintains a long position in Apple Inc. (AAPL).
Bernstein currently makes a market in the following companies AAPL / Apple Inc.

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