With All Eyes On Apple's Cash Hoard, GE, Comcast And Others Share The Wealth

(Photo credit: 401(K) 2013)

By now, the latest twist in the debate over Apple?s cash hoard is well known. Tim Cook politely dismissed hedge fund billionaire David Einhorn?s call for a preferred share launch at a conference Thursday, reiterating that the iBoard is actively discussing ways to return capital to shareholders.

For all the attention on Apple?s cash pile though, Deutsche Bank?s Owen Fitzpatrick points out that the last 24 hours have featured major capital deployments from a trio of big companies, and they are hardly the only ones returning cash to shareholders.

General Electric upped its buyback authority by a hefty margin ? to $35 billion ? after agreeing to sell its remaining 49% stake in NBCUniversal for $16.7 billion. The fact that GE would steer that windfall to its shareholders is not particularly eyebrow-raising, Fitzpatrick said during a breakfast panel at Deutsche Bank?s Park Avenue offices Wednesday, but what is surprising is that the company to which it sold NBCU, Comcast, upped its own capital return. (See ?Comcast Ups Dividend, Announces Buyback And Buys The Rest Of NBC.?)

Shelling out billions for an acquisition would be an easy excuse for Comcast to cool its heels on capital return for a time or even pull back. Instead, the company?s board authorized management to repurchase $2 billion of the company?s stock and raised the dividend 20% to 19.5 cents.

Meanwhile, Dutch firm LyondellBasell Industries is seeking shareholder approval to purchase up to 10% of its outstanding shares over 18 months, a buyback that would equal more than $3.5 billion at recent prices, and announced an interim dividend of 40 cents per share.

Among the other companies that have upped their payouts to shareholders this year are a pair backed by billionaires. Sheldon Adelson?s Las Vegas Sands, which paid out a fat special dividend in late 2012, upped its regular dividend 40% in late January. And Carl Icahn?s publicly-traded investment firm Icahn Enterprises, which he owns 93% of, nearly tripled its annual distribution earlier this week.

The cash return is part of the story that has Deutsche Bank?s wealth management arm optimistic about the equity market over the medium to long term. Fitzpatrick, the head of U.S. large cap and equity strategy for Deutsche Asset Management, says Einhorn?s recent angling for Apple to deliver more value to shareholders ? beyond the $45 billion in capital it has already committed to returning via dividends and buybacks ? is telling.

?If you have cash, someone wants it,? he says, noting that Apple has been a great company and after just two hours of missing earnings estimates it already has an activist investor on its tail.

Clearly companies like Comcast and GE, are mindful of that reality in an environment where investors look to the equity market for yield due to the paltry rates on many fixed-income instruments like U.S. Treasuries.

Interestingly, shares of Comcast (+4.5%), GE (+3.4%) and LyondellBasell (+3.6%) were all higher on a day when the broader market spent the morning narrowly in the red before flattening out, with the S&P 500 up less than 0.1% at 1,520.

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Source: http://www.forbes.com/sites/steveschaefer/2013/02/13/with-all-eyes-on-apples-cash-hoard-ge-comcast-and-others-share-the-wealth/

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