Apple's rare move core policy for NZ firms

Apple's decision to pay a dividend is a rare move for the world's most valuable company but it's the norm for New Zealand listed companies.

Tim Cook, chief executive of the United States technology giant, yesterday announced it would begin a dividend and share buyback scheme worth more than US$10 billion ($12 billion) from July. Apple plans to pay a quarterly dividend of US$2.65 a share. It has not paid a dividend since 1995.

Rickey Ward, head of equities at Tyndall Investment Management, said New Zealand companies tended to be income rather than growth oriented, paying out dividends to their investors.

"We are not a technology-based market, we are a utility based capital market."

That meant the New Zealand market was a good place to be during tough times like the last couple of years. US investors had been buying into New Zealand stocks because of the strong dividend yields, he said.

Paul Glass, principal of Devon Funds Management, said US companies tended to reinvest their capital into growth, rewarding investors through share price increases rather than dividends.

"They are different sorts of markets."

Glass said it was typically a lot harder for New Zealand companies to grow like those in the US where the market was a lot bigger.

Apple, worth US$553 billion, is sitting on US$97.6 billion in cash and securities.