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Apple ‘Investor Frustration’ Builds as Cash Rises: Chart of Day

Apple Inc. is so flush with cash that it’s time for the company to start paying dividends and buying back stock, according to Toni Sacconaghi, a Sanford C. Bernstein & Co. analyst.

As the CHART OF THE DAY shows, Apple had $45.8 billion in cash and securities as of June 26, when its fiscal third quarter ended. The figure includes investments maturing in more than a year, which aren’t categorized as current assets under U.S. accounting rules.

Apple’s holdings have soared more than ninefold since 2004, including a 47 percent increase for the 12 months ended in June, according to data compiled by Bloomberg.

The surge is a “common and growing source of investor frustration,” Sacconaghi wrote today in a report, written as an open letter to Chief Executive Officer Steven Jobs and the iPod, iPhone, iPad and Macintosh computer maker’s board. “We implore you to consider returning cash to your shareholders.”

Investors generally want Apple to resume a regular dividend and repurchase shares, although many of them also see a one-time payout as desirable, according to Sacconaghi. The company hasn’t paid dividends since 1995, and Jobs said at its annual meeting in February that he would rather hang onto cash.

Cash is likely to increase further unless Apple takes action, the report said. Sacconaghi estimated that the company will generate about $20 billion in the fiscal year starting in October, and needs less than $10 billion to run its business.

(To save a copy of the chart, click here.)

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