In an effort to overcome investor hostility Dell is going to do something it\u2019s never done before \u2013 despite the fact it had no R&D to speak of \u2013 and that\u2019s pay a quarterly dividend beginning in its third quarter which ends in November. <\/p>\n
It\u2019ll pay 32 cents a year, a return of roughly 2.7% based on the stock\u2019s closing price of $11.86 on Monday. The expense will cost the company about $560 million a year. <\/p>\n
Dell figures it\u2019s got the cash flow, which has generated $4.9 billion in the last four quarters, to buy back stock and pay the dividend despite its nasty earnings and revenue slip last quarter. <\/p>\n
While still the world\u2019s third-largest PC supplier, Dell claims it\u2019s \u201cchanged the conversation we\u2019re having with our customers. We are a solutions company first, vertically focused, and creating more value for customers with innovative offerings that provide competitive advantage.\u201d <\/p>\n
At the end of April Dell had $17.2 billion in the bank and wants to keep making acquisitions to get out of its PC hole. It made eight acquisitions in the last 12 months, doubled the number of engineers developing enterprise solutions and more than tripled the number of specialists selling solutions over the past five years. <\/p>\n
The result has been a shift in Dell\u2019s sales to higher-margin data center solutions consisting of servers, networking, storage and related software and services. It says it\u2019s getting 50% of its gross margin and more than 30% percent of its revenue from enterprise solutions and services. It projects they will grow at compound rate of 10% a year through fiscal 2016 and represent an increasing percentage of its operating income margin. <\/p>\n
It made the announcement at its annual analysts meeting.<\/p>\n