For investors, a company with cash can be a good sign. With extra cash, companies are able to serve their shareholders by raising dividends, buying back shares or making acquisitions. Below are seven charts that put massive corporate cash holdings in perspective.
*All data as of January 16, 2015.
Companies with the Most Corporate Cash
Apple (AAPL ) is by far the most cash heavy company. It has more than twice as much cash as Microsoft (MSFT ), which has the second highest amount of cash. Google, Verizon (VZ ) and Pfizer (PFE ) are also leaders when it comes to cash. For more information on Apple’s massive cash load, check out What Can You Buy With Apple’s Cash?
All five of these companies have seen an increase in their cash holdings over the last five years, but Apple’s cash has been visibly growing much more rapidly than its cash holding peers.
Apple’s Cash Load
Apple’s cash accounts for almost 10% of all corporate cash holdings, excluding financial services. Other than the financial services industry, the two most cash heavy industries are technology and health. Apple’s cash accounts for nearly 30% of all cash held by companies in the technology industry. For more on Apple’s cash check out 10 Charts to Put Apple’s Cash and Earnings in Perspective.
Technology Industry Vs. Malaysia
The most cash heavy tech companies, Google and Microsoft—have enough corporate cash to compare to Malaysia’s cash reserves. Although Apple is the only tech company that has exceeded the amount of cash that the country has in reserves, its peers are growing.
North America Vs. The Dow 30
The Dow stocks with the largest cash piles are Microsoft, Verizon, Pfizer, Cisco (CSCO ) and Johnson & Johnson (JNJ ). Below are these five stocks compared to the North American foreign-exchange reserves.
Cash Vs. Dividends
While the amount of cash spent on paying dividends seems small when compared to the total amount of cash, these stocks (excluding Google) all offer attractive yields. With Apple’s cash pile, many investors feel that its dividend should be hiked significantly.
See Also: Why Google Doesn’t Pay a Dividend.
New Jersey Vs. Healthcare Companies
New Jersey is home to some of the largest pharmaceutical companies, including Pfizer, Johnson & Johnson and Merck (MRK ). Below is the comparison between the cash of the big healthcare names and the Gross State Product (GSP) of New Jersey.
The Bottom Line
With large amounts of cash on the books, many investors expect a decent dividend from some of these companies. Apple was criticized for not paying shareholders a dividend until it reinstated a dividend in 2012. Some investors question why Google does not pay a dividend when it has so much cash, but the company is not expected to start paying a dividend anytime in the foreseeable future.