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$AAPL Drops Dimes on Capital Distribution

“Signals out of the ultra-secretive executive suite at Apple increasingly point to an announcement soon of a dividend increase, buyback or another form of capital distribution to shareholders. The latest came from an analyst report Sunday.

“While trying to extract information fromAAPL (Apple) management is like squeezing ‘water from a rock,’ we did speak with AAPL CFO (Peter Oppenheimer) this past Friday and found the conversation helpful,” wrote ISI analyst Brian Marshall in a note to clients Sunday. “We touched upon a variety of topics, including capital allocation framework.”

(Read MoreApple and Samsung: Frenemies for Life)

After speaking with Oppenheimer, ISI’s Marshall recommended back to the company in Sunday’s report that it increases its current 3-year allocation plan amount to $60 billion from $45 billion. His plan, which would use 50 percent of the firm’s annual free cash flow, puts two-thirds of the cash toward a dividend and the rest to buy back shares.

Marshall’s conversation followed a rare press release Thursday from Apple, which came in response to a call from activist investor David Einhorn for the world’s largest technology company to issue preferred stock.

“By early last year, Apple’s cash balance had built to a point beyond what we needed to run our business and maintain flexibility to take advantage of strategic opportunities, so we announced a plan to return $45 billion to shareholders over three years,” stated the company in response to Einhorn. “Apple’s management team and Board of Directors have been in active discussions about returning additional cash to shareholders.” …”

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