Welcome to Week 12 of the Big Idea Portfolio. Apple (NAS: AAPL) , Google (NAS: GOOG) , and salesforce.com (NYS: CRM) all gained more than 2% for the week, but it was the Mac maker that made the most headlines. I'll have more on why in a minute. First, let's dig into the numbers:
S&P 500 SPDR
Source: Yahoo! Finance.
* Tracking began at market close on Jan. 6, 2012.
** Adjusted for dividends and other returns of capital.
Apple finally did what many of us deemed impossible -- or even unwise -- and agreed to pay a dividend. Investors can expect to receive $2.65 per share beginning in the fourth fiscal quarter that kicks off in July. All told, the Mac maker expects to pay out $45 billion through dividends and a $10 billion stock buyback over the next three years.
In a call with analysts, CEO Tim Cook explained the rationale for a dividend, saying that the payout would "broaden Apple's investor base by attracting new investors who don't currently own Apple stock." He didn't specifically call out institutional investors and fund managers who refuse to bet on non-dividend-payers, but there's no mistaking the subtext. Rising trading volume, coupled with the rally, suggests that Cook's strategy is working so far.
What's interesting is that even as Cook was demonstrating how different he would be as a steward of shareholder capital, there remained a familiarity in the rhetoric he used in talking about Apple's growth prospects. In responding to a question about the product pipeline and Apple's typical guardedness when it comes to launching new gear, Cook mixed humor and bravado.
"We actually do love to announce new products. We just don't do it in conference calls," Cook said. "Let me tell you, I'm extremely confident in our future. The pipeline is full of stuff, and I think our customers are going to be incredibly pleased with what they see coming out."
Sound like anyone you know? A former Apple co-founder and CEO, perhaps? Cook may not be Steve Jobs, but he and his team seem determined to expand the empire he left behind -- although the new iPad may be heating up a little more than Cook would like.
Google's rally isn't as easy to explain, though one thing is clear: The Big G's rivalry with Facebook is heating up. New hire Kevin Rose, founder of the content aggregator Digg, could help Google get smarter about social search, while the company vies with Microsoft (NAS: MSFT) over ways to improve the speed with which Hypertext Transfer Protocol, or HTTP, delivers Web pages. With more and more users treating the Web as an operating system for hosting useful software, both companies have a vested financial interest in improving the Web's networked underpinnings.
Finally, salesforce.com rallied as investors greeted good results from Oracle (NAS: ORCL) with muted applause. Adjusted earnings are on track to grow just 1% to 5% next quarter, partly as a result of tough competition in the cutthroat hardware business. Yet enthusiasm for cloud computing could also be playing a role, enticing customers to switch from Oracle's buy-and-setup apps to the pay-as-you-go models espoused by salesforce.com and peer NetSuite.
The week that was
Apple, Google, and salesforce.com weren't the only tech winners. The Nasdaq rallied 0.4% for the week and is up 17% year to date. Both the Dow Jones Industrial Average and S&P 500 fell, but the Dow took the bigger beating, down 1.2% for the week, CNBC reports.
See you back here over the weekend for more tech-stock talk. And remember to check out the Fool's latest special report -- "3 Stocks That Will Help You Retire Rich" -- and add the Big Idea portfolio stocks to your Foolish watchlist for ongoing, up-to-the-minute coverage. Both the report and the watchlist as 100% free to use:
At the time thisarticle was published Fool contributorTim Beyersis a member of theMotley Fool Rule Breakersstock-picking team. He owned shares of Apple, Google, Rackspace Hosting, Riverbed Technology, and salesforce.com at the time of publication. Check out Tim'sWeb home,portfolio holdingsandFoolish writings, or connect with him onGoogle+or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.The Motley Fool owns shares of Google, Microsoft, Apple, and Oracle.Motley Fool newsletter serviceshave recommended buying shares of Riverbed Technology, Apple, Google, Microsoft, Rackspace Hosting, salesforce.com, and NetSuite, creating bull call spread positions in Apple and Microsoft, writing covered calls on Riverbed Technology, and creating a bear put spread position in salesforce.com. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.