What once looked like a budding trend is now a clear reality: Tech companies are increasingly giving back to investors in the form of dividends.
And Sandisk (SNDK) is the latest to join their ranks.
The flash memory storage solutions company announced this morning that it would initiate a dividend policy, falling under the same umbrella that companies like Cisco (CSCO), Apple (AAPL) and EMC (EMC) have huddled under during the past few years.
SanDisk’s first quarterly dividend of 22.5 cents per share is payable on Aug. 30 to shareholders of record on Aug. 12, and providing investors with a 1.6% dividend yield based on SanDisk’s Wednesday closing price.
SanDisk also approved a $2.5 billion share repurchase authority, and SNDK is expected to complete its purchases no later than April 8, 2014.
SNDK was trading ahead more than 4% in early Thursday trading.
Tech companies historically have been loath to produce dividends, instead plowing back cash into their businesses to fund research and development and capital expenditures. In the early 2000s, both Microsoft (MSFT) and Intel (INTC) loosened the purse strings, and today technology companies are paying out the highest level of dividends in the S&P 500, distributing more than $10 billion in the March-June quarter, according to Bloomberg.
Indeed, the industry is flush with cash, and dividend payments should continue to grow.
Those looking for the next technology company that could — and should — join the dividend payer’s list might cast an eye on Google (GOOG), a continued holdout currently sitting on nearly $50 billion in cash and short investments.
In the meantime, welcome to the club, SanDisk — it’s nice to have you around.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he was long MSFT and AAPL.