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We know, you’re tired of hearing about Apple’s $97bn wad of cash and whether the company will ever reward its thankless shareholders by instituting a dividend or buying back shares.
But Moody’s has just finished its update of US non-financial corporate cash piles through the end of last year, and truthfully we were surprised by the extent to which Apple is behind the bigger trend from the last couple of years (emphasis ours):
Apple alone represents $64 billion or 36% of the total $179 billion increase in corporate cash since 2009. And in 2011, overall corporate cash would have actually declined by $6 billion had it not been for Apple's $46 billion increase. Unless Apple changes its philosophy towards liquidity by instituting a one-time or ongoing common dividend, or if Apple starts to buy back stock, we estimate Apple's cash balances could increase by more than $50 billion in 2012 and approximate $150 billion.
Supported by our expectations that consumers worldwide will continue to feast on Apple products, we expect overall corporate cash and its concentration will increase in 2012. Apple alone could represent 12% of total corporate cash, about three times more than the next cash king. …
In Figure 7 below, we show the percentage of cash attributable to the top cash holders. Through 2009, the amounts held by the "cash kings" held steady, with the top 50 holders representing just over 50% of total corporate cash. And then the Apple phenomenon went into overdrive.
Here, by the way, are the other cash kings in the top ten:
Six tech companies on the list, and we were surprised to see both GM and Ford on there. The top five companies account for 22 per cent of the total.
No broader lesson here, perhaps other than to beware of skewed headline numbers. The report notes that share buybacks, dividends, acquisitions and capital expenditures all climbed last year…
… and now it seems corporates are increasingly starting to hire people too. Given the heavy concentration at the top, maybe the cash-hoarding meme has been somewhat overstated?
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© The financial Times Ltd 2012 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
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