Dell (DELL) may soon pay a dividend! June 12, 2012 is the date that the Board of Directors at Dell adopted a policy under which it intends to pay a quarterly cash dividend. The indicated rate is $0.32 per share per year, or $0.08 per quarter. The dividend may start in its third quarter.
The Board of Directors revised the terms of restricted stock units awards (RSU's) and performance-based restricted stock unit awards (PBU's) so that each holder is entitled to receive the dollar amount of the per-share cash dividend.
Source: 8-K SEC 8-K filing
On May 23rd this article, Dell 10 Year Review, was published with the stock at $12.50.
The stock, (currently at $12.50) is taking a beating after the release of earnings. If funds allocated to share repurchases were paid out to owners as dividends then the stock might find some support based upon the dividend yield. However, this would require a change of thinking at the board level.
Dell closed the regular trade on June 12th at $11.97. It was slightly higher in after-hours trading. It would appear that the Board has had a change of thinking. This may help the stock price stabilize and even rebound higher.
Should the Board follow through by declaring and paying a dividend of $0.32 per year. Then at the current stock price of $11.97 it would yield 2.67%, or more than the 10-year US Treasury.
Dell investors now have a reason to own the stock, and no longer need to sell shares to raise cash. This is good news. And there is room for dividend increases if cash-flow is maintained and or funds previously allocated for sellers of shares are provided to owners of shares.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.