Cash-Rich Google Should Consider Dividend

By Barbara E. Hernandez

| Wednesday, Mar 21, 2012 | Updated 11:18 AM PDT

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Analysts and shareholders want cash-rich Google to offer a dividend, but the company shows no signs of following Apple's lead.

Should Google give its shareholders a dividend? That's what some analysts are suggesting in order for cash-rich Google to promote goodwill. After all, hasn't the dividend-reluctant Apple capitulated and will now give their shareholders a share of is profits?

Google is cash-rich, having $44.63 billion in cash as of Dec. 31, and is the only tech company with a market cap above $100 billion that doesn't offer a dividend, according to All Things D.

“It probably has the most to gain in terms of positive sentiment by doing so, given its propensity for acquisitions and mixed investor sentiment around the Motorola Mobility deal," said Barclays analyst Anthony DiClemente.

But perhaps Google isn't as cash-rich as it seems, because a lot of that money is tied up in overseas accounts away from America's higher taxes -- if it comes back to U.S. shores, it's a major tax hit. So maybe Chief Executive Officer Larry Page has a reason to hoard Google's remaining cash.

But the desire for a dividend won't go away. In today's tough economy, more and more investors are looking for companies that are good investments and also deliver dividends. It's one of the ways investors are hoping to make money in times of lower growth.

So while Google and other companies may resist pressure to offer a dividend, it may prove to be one of the most important ways to appease current shareholders and attract new ones..

Related Topics Google, Apple, Motorola, dividend, shareholder

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