By Nathalie Tadena Dividend payments by technology companies are expected to rise 14% in 2012 from a year earlier, despite the ongoing fragile recovery, according to a recent Moody's Investors Service report. Dividend payments are expected to approach $26 billion in 2012, Moody's said. Senior Vice President Richard Lane said the increased dividend payments won't affect ratings because dividend-paying technology companies still maintain ample financial flexibility. Lane said these companies have a relatively low 21% payout ratio relative to discretionary cash flow and significant balance sheet liquidity. Though dividends are on the rise, the ratings firm said payout ratios in the technology sector will lag other industry sectors. Moody's noted tech companies are constrained by their reluctance to repatriate overseas cash and operational requirements, thus keeping their ratios below 30%. Tuesday, Dell Inc. (DELL) said it plans to pay a dividend beginning in its fiscal third quarter, becoming the latest technology company looking to boost shareholder value and attract a new group of investors. Many technology companies, particularly younger ones like Google Inc. (GOOG), resist the notion of dividends. But some mature technology companies--including Dell's biggest competitor, Hewlett-Packard Co. (HPQ)--have paid them for years. Companies that have recently shifted their stances on the issue include consumer-electronics giant Apple Inc. (AAPL), which in March unveiled plans for its first-ever dividend, and Marvell Technology Group (MRVL), which makes chips for hard-disk drives and mobile devices, announced its first payout last month. Moody's noted Apple will dwarf previous payouts, with a run rate dividend of nearly $10 billion expected this year, surpassing Exxon Mobil Corp.'s (XOM) estimated $9 billion dividend and just behind AT&T Inc. (T) $10.2 billion dividend. Meanwhile, Moody's expects Google and eBay Inc. (EBAY) to hold back from initiating dividends as they focus on domestic cash management and other cash deployments. -Write to Nathalie Tadena at nathalie.tadena@dowjones.com
