Why Alphabet and Meta Should Pay Dividends (2024)

FAQs

Why is Meta paying a dividend? ›

Paying a dividend could allow Meta shares to be included in mutual and exchange-traded funds that only hold shares in companies making regular payouts. Such funds buy 0.5% of a company's outstanding shares the year after it initiates a dividend, Goldman Sachs analysts have found.

A greater demand for a company's stock will increase its price. Paying dividends sends a clear, powerful message about a company's future prospects and performance, and its willingness and ability to pay steady dividends over time provides a solid demonstration of financial strength.

So for many years, Alphabet prioritized the expansion of its business above buybacks or dividends -- and that focus paid off. From 2004 to 2023, its annual revenue grew at a compound annual growth rate (CAGR) of 27% as its net income rose at a CAGR of 32%. Its stock has soared 6,750% since its IPO.

First, they provide a regular income stream, which can be especially attractive to income-focused investors such as retirees. Second, dividends are often seen as a sign of a company's financial health and stability, as they indicate that it's generating enough profits to distribute at least some to shareholders.

Alphabet, Amazon likely to follow Meta by introducing first-ever dividends in 2024 | Morningstar.

Meta's dividend payments will be worth billions

Meta said its quarterly dividend will be $0.50 per share, which will be paid out for the first time at the end of March 2024. On an annual basis, that's $2 for every share that an investor owns.

Conclusion. A stock dividend can reward shareholders with additional company shares instead of paying them in cash. The stock dividend does not impact a shareholder's net worth. However, it increases the number of shares in the market, generating additional liquidity for shareholders.

Advantages: Minimizes new stock issues and flotation costs. Disadvantages: Results in variable dividends, sends conflicting signals, increases risk, and doesn't appeal to any specific clientele.

A high-value dividend declaration can indicate that the company is doing well and has generated good profits. But it can also indicate that the company does not have suitable projects to generate better returns in the future. Therefore, it is utilizing its cash to pay shareholders instead of reinvesting it into growth.

The market for online advertising is still evolving and growing, making revenue estimates on companies operating within that space difficult to figure. This is part of the reason social media companies tend not to pay dividends.

How much dividend does alphabet pay? ›

Historical dividend payout and yield for Alphabet (GOOG) since 1971. The current TTM dividend payout for Alphabet (GOOG) as of April 19, 2024 is $0.00. The current dividend yield for Alphabet as of April 19, 2024 is 0.00%.

Anyone who is a stockholder as of the close of business on 22 February 2024 should expect the first dividend payment on 26 March, 2024. Thereafter, dividends will be distributed quarterly, so long as market conditions and the board of directors permit.

Mutual fund investors who don't want to take their dividend payouts can choose from either a growth option or a dividend reinvestment option. With a growth option, the investor lets the fund company invest the dividend payments in more securities and ultimately grow their money.

According to the February press release, Meta's board of directors declared a cash dividend of $0.50 per share of Class A and Class B common stock. Anyone who is a stockholder as of the close of business on 22 February 2024 should expect the first dividend payment on 26 March, 2024.

Meta Platforms, Inc.'s ( META ) ex-dividend date is February 21, 2024 , which means that buyers purchasing shares on or after that date will not be eligible to receive the next dividend payment. Meta Platforms, Inc. ( META ) pays dividends on a quarterly basis.

Meta announced on Thursday that it will pay a quarterly dividend for the first time, and said it authorized an expanded $50 billion share buyback program. The company will pay a per share dividend of 50 cents, joining peers Apple , Microsoft and Oracle , which all have regular payouts.

After a big 2023 rally and a huge earnings beat in the fourth quarter, Meta is again making new all-time highs, smashing over $500 per share in March 2024. The tech stock has been an exceptional investment in almost any time frame you choose.