Some good discussion here on buyback vs. dividend, dividend vs. acquisitions/other uses of the cash.
A largely reasonable discussion/points(!).
My 2 cents - I think the Nokia BoD will be predisposed to return to a sustainable dividend as soon as possible - many shareholders are Finns who bought Nokia because it was a good value investment for them, and the BoD will want to address that. Nothing wrong with that - many Finns are legitimate and long term stakeholders in this business, and they want some return for their personal use.
My advice to the BoD (and I know they're waiting for my advice on this) - establish a safe dividend, and no special dividend. Instead of a special dividend, do a combination of share buyback, acquisitions if warranted, and invest in growing current businesses.
The regular dividend historically has been set based on the previous year's performance. The amount suggested to the BOD comes out in Jan. and the board formally sets it in May. Based on the Jan12-Dec12 performance, I would say the regular dividend will be null.
As far as the special dividend, the D&S sale announcement indicates that excess capital WILL be returned to shareholders. Unless you think there isn't excess capital for Nokia's current business and for strategic buys perhaps, then there will be a special dividend. My guess is that they will want to keep all the cash because they want to get investment grade for their bonds, and retain capital for expansion/acquisitions.
I own options, some that expire in 2015, so for me it is better that they don't pay a regular dividend, since my option strike is not adjusted. If they pay a special dividend, it doesn't matter for my options (all other things being equal), since the strike price will be adjusted down by the same amount.
50 cents/share. With the three divisions profitable and throwing off cash the BOD can easily afford to return that much to the long suffering shareholders IMHO. One analyst was predicting up to 1.50 euro/share.
Would you give a special dividend when the handset business is turned over to MSFT right away or wait? This is good public relations, but are they here for public relations or growing the business? I realize that european countries do things differently and not a crazy as how US corporation are runned.
If the board decides to buy another co (ALU?) , then don't count on a dividend. But if the board announces a one-time dividend and/or recurring annual div, then a buyout of another co will not be happening anytime soon.
I don't see a special dividend anytime soon, nor a return to the regular annual dividend. Nokia doesn't know how much cash they'll need so they can't determine what constitutes "excess."
Healthy companies EARN their dividend. They don't pay a dividend out of cash reserves. It comes out of earnings. I'd guess two profitable quarters in a row, with definable improving trends, before any shareholder payout is considered.
guess if? ...yes a special and a return to regular yearly
know how much? no....the BOD doesn't even know yet, but they said they would return any excess cash beyond what is needed....but they are free to define need the way they see fit.