Apple and Cisco distribute record dividends

The technology sector led by Apple and Cisco are paying a record amount of dividends boosting cash returns to comfort investors confused by slowing growth. Technology companies in the Standard & Poor’s 500 Index distributed $10.8 billion in dividends in this quarter, doubling up from $5.1 billion in the same period in 2010. They paid a record $11.9 billion in dividends in the previous quarter, according Bloomberg.

The average dividend yield which measures payments in the last 12 months as percentage of market value, is 1.21% for technology companies, the first time it has exceeded 1% in at least 15 years.

The two companies and Dell, have acquired total of $590 billion of cash, up from $508.5 billion a year ago and $436.5 billion two years ago, according to data compiled by Bloomberg. Dividend payouts are likely to keep rising slower-growth companies which may raise expectations that giants such as Google Inc. will follow the trend, said Jennifer Koski, a finance professor at the University of Washington in Seattle.

Apple Inc. continued to rake in money, boosting its cash bank to $137.1 billion at the end of last year. Investors, lobbied Cook to return more money as Apple’s stock price struggled. In April, the company unveiled a plan to add $55 billion to its dividend and buyback plan, for a total of $100 billion. The announcements came the same day Apple reported its first profit drop in a decade, and were followed in May by a congressional hearing at which senators accused the company of using weaknesses in US tax law and channeling money into offshore entities to avoid paying U.S. taxes.

Microsoft, Intel, International Business Machines Corp. and Oracle Corp. are among other technology companies that have paid dividends before 2010 and have increased the payments each year. Of total 70 tech companies included in S&P 500, 36 are paying dividends.

Google, Internet search engine giant, doesnt pay dividend, though it has $51.6 billion of cash and investments. Tim Drinan, a spokesman for Google, declined to comment for Bloomberg on the possibility of a dividend.