The Financial Post reports in its Wednesday edition that Alphabet is bringing in so much cash that hopes are rising it will take a page out of the Meta Platforms playbook and start paying a dividend. The Post's Shantae Campbell writes that the Google parent has been plowing excess cash into share buybacks for years and many investors expect another $70-billion (U.S.) to be earmarked when Alphabet reports earnings April 25. Meanwhile, analysts from JPMorgan to Truist Financial are among those that see a small dividend as a way to move the needle further for the stock, similar to Meta's February move that helped fuel a 20-per-cent jump in shares. "A dividend would be well received," said Andrew Zamfotis at Ami Asset Management. "While investors are still looking for growth from these companies, today, there is also value in cost discipline and the decision to initiate a dividend suggests that management will be prudent and attempt to allocate capital in a way that balances growth and capital return." Dividends are usually the province of more mature and slower-growing companies, but the policy has been gaining popularity among tech firms. Among Big Tech, Alphabet and Amazon are the only ones that do not have a payout.
© 2024 Canjex Publishing Ltd. All rights reserved.