3 Companies That Need to Give Cash Back to Patient Investors

by: Mark Riddix

I want to take a look at a few companies that need to follow Microsoft’s lead and return some cash back to their investors.

Here are 3 cash rich companies that can afford to pay more to shareholders.

1. Oracle (NASDAQ:ORCL)

For a company that has so much cash, Oracle has been a lousy investment over the past decade. The company’s performance has been worse than Microsoft, losing 33% of its value over the past 10 years. Oracle has nearly $24 billion dollars in cash on its balance sheet. The tech company currently pays out just 20 cents per share to shareholders. That’s a 0.70% yield.


This “value play” has been an abysmal investment over the past decade. Shares are down a whopping 65%. It’s time for Dell to start paying its beleaguered shareholders a dividend. The company cannot justify not rewarding investors with a cash dividend when all of its moves have been the wrong ones. The company might as well return some cash back to shareholders while it still has its $12.4 billion in cash. A tiny 1% dividend would be a nice start for a company whose growth days are long gone.

3. Cisco (NASDAQ:CSCO)

Cisco is the definition of a cash cow. The company has forty billion dollars in cash and $10 billion dollars in free cash flow. Cisco is another poor performer. Shares have lost 63% of their value over the past decade. The company’s CEO is considering offering a dividend in 2011. A company like Cisco can afford to start investors off with a decent 2% yield.

Final Thoughts

Companies like Apple (NASDAQ:AAPL) and Research in Motion (RIMM) can get by without offering dividends to stockholders because of the performance of their stocks over the past decade. Maturing companies with low growth rates and lots of cash need to offer their longsuffering shareholders a reason to stay on board.

Disclosure: The author holds no position in any of the stocks mentioned