Payout ratio to climb to 44%
SAP (SAP) is seeking to release more money to shareholders in the form of dividends. The company wants its shareholders to back a board proposal to raise its dividend to 1.50 euros ($1.70) per share in fiscal 2018. If all goes well, SAP hopes to release the proposed dividend to shareholders by May 20.
If the proposal secures the required approval, SAP’s fiscal 2018 dividend payout will amount to ~$2.0 billion, suggesting a dividend payout ratio of 44% based on SAP’s profit of ~$4.5 billion last year. SAP paid out $1.9 billion in dividends in 2017, representing a payout ratio of 41%.
SAP sitting on ~$10 billion in cash
In 2017, SAP returned ~$570 million to shareholders through share repurchases and dividends. Google parent Alphabet (GOOGL) and Alibaba (BABA) also have huge share repurchase programs. Alphabet announced a plan last year to return $8.6 billion to shareholders through share repurchases, and Alibaba plans to return $6.0 billion to shareholders in two years. Last year, Intel (INTC) returned $10.7 billion to shareholders in the form of share repurchases, and IBM (IBM) repurchased $2.0 billion in shares. IBM has $3.3 billion remaining in its repurchase program. SAP closed last year with $9.8 billion in cash.