Analyst meets with Apple CFO; expects a 6% dividend

Apple CFO Peter Oppenheimer

Huberty

FORTUNE -- While Greenlight Capital's David Einhorn was lobbying shareholders Thursday to support his perpetual preferred stock idea (see Would you buy an iPref from this man?), Morgan Stanley's Katy Huberty has been meeting with the Apple (AAPL) executive who rejected Einhorn's proposal last September: Chief financial officer Peter Oppenheimer.

In a note to clients Friday, Huberty reports that she came out of those meetings convinced that Apple is likely to more than double its current 2.3% dividend.

"Our analysis," she writes, "suggests Apple can match the S&P IT sector's average FCF [free cash flow] payout of 68% if it returns $28B in FY13, implying a 6% total yield. High mix of international cash limited flexibility in the past but raising low-interest debt can help address this issue, in our view."

Borrowing money to give to shareholders is also the approach favored by Bernstein's Toni Sacconaghi, who has been hounding Apple's board of directors to issue a dividend since 2008, when the company's cash horde was less than $30 billion. Apple grew its cash holdings by $39.5 billion in just the last 12 months to reach a total of $137.1 billion.

Source: http://rss.cnn.com/~r/fortunebrainstormtech/~3/lZB3UbjbgvI/

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