Dividend Yield: 1.5%
Last Dividend Increase: 100%, announced June 2013
Yes, Oracle announced a doubling of its dividend payment just a month ago, to be paid out Aug. 2. But ask shareholders about ORCL’s flat returns over the past two years and see if they’re satisfied yet.
Oracle’s pitiful dividend yield isn’t a result of a screaming stock, but just a lack of cash paid out to shareholders. ORCL shares are in fact in the red year-to-date, as the company is struggling to grow in the crowded enterprise space. Most recently, fourth-quarter results showed flagging growth, just like the third quarter — and the company went so far as to blame its salespeople both times around.
Growth — and with it, performance — might be a long way off.
Meanwhile, Larry Ellison and his company sit on $32 billion of cash and short-term equivalents, and pumped out more than $5 billion in free cash flow in just the past quarter — more than enough to cover the roughly $2.2 billion it would pay out in dividends annually at 12 cents per quarter. It has the cash, and its 13% dividend payout ratio is well below the S&P 500 average. ORCL … open up your purse strings.