Apple CEO Tim Cook (NASDAQ:AAPL) on Tuesday downplayed the possibility that the tech giant could offer its shareholders a special dividend due to recent changes to the U.S. corporate tax code that allowed companies to repatriate international cash at a lower tax rate, a key provision in President Trump’s tax reform plan.
“Special dividends, I’m not really a fan of,” Cook said when asked about the possibility during Apple’s annual shareholder meeting in Cupertino, California. “But in terms of annual increases in the dividend it is something that this board and management are committed to doing.”
Cook said Apple will provide an update on its plans for capital allocation on the company’s next earnings call in April. Apple listed $252.3 billion in overseas cash in its most recent filing with the SEC. The company said last month it expects to pay roughly $38 billion in repatriation tax payments to bring that cash back to the U.S.
Loup Ventures Managing Partner Gene Munster said he expects Apple to announce a stock buyback in the near future after the passage of tax reform.
“After they’ve paid their taxes and repatriation, Apple will have somewhere around $230 billion in cash. We expect that $70 billion will be allocated over the new couple of years to share repurchase. That can actually lift the stock,” Munster said during an appearance on FOX Business’s “Varney & Co.”
Munster added that Apple would “probably” disperse a one-time dividend after the cash repatriation.
“They’ll probably give a one-time dividend of around $12 billion and then they may do a little of [mergers and acquisitions],” he said.
Apple said last month it would create an estimated 20,000 U.S. jobs and establish a new company campus as part of $350 billion in what it called “direction contribution” to the economy over the next five years.
So far this year, Apple shares have lost nearly 4%.