Tech star backs Apple to pay dividend for first time

Henderson’s Stuart O’Gorman has said Apple may finally start paying dividends as the company evolves following the death of co-founder Steve Jobs.

Apple has famously never paid a dividend despite having built up cash reserves totalling $76bn but O'Gorman, manager of the £340m Henderson Global Technology fund, believes that cash pile will increasingly be the focus of shareholder attention following Jobs' passing.

"Steve Jobs was an unbelievably brilliant manager. The only criticism, if you could dare to make one, was that he was a bit of a cash hoarder", O'Gorman said.

"There is a very strong possibility that shareholder activists will now start to pressure Apple to start returning that cash to shareholders."

At 9.8% of his portfolio, Apple is the top holding in O'Gorman's fund, and the manager said the company does not need to continue its record of bold innovation in order to prosper in future.

"The thing it really needs to do now is not screw up. Apple does not need to be that innovative at these sorts of valuation levels, it just needs to monetise its existing customer, which is very good and very rich".

While he acknowledged the tech sector is still home to M&A activity of questionable value, O'Gorman believes increased shareholder activism is making many CEOs think more carefully about acquisitions, potentially increasing the focus on share buybacks or dividends.

"You are seeing shareholders complain an awful lot more about stupid things people are doing", O'Gorman said, pointing to the departures of chief executives at Yahoo and HP in recent months.