Money Research Collective’s editorial team solely created this content. Opinions are their own, but compensation and in-depth research determine where and how companies may appear. Many featured companies advertise with us. How we make money.
Alphabet, Now a $2 Trillion Company, Will Start Paying Dividends to Shareholders
By Jordan Chussler MONEY RESEARCH COLLECTIVE
Google’s parent company recently announced its first-ever dividend and an enormous stock buyback program.
***Money is not a client of any investment adviser featured on this page. The information provided on this page is for educational purposes only and is not intended as investment advice. Money does not offer advisory services.***
Google’s parent company Alphabet recently made some announcements that should have current shareholders and prospective investors equally excited.
In its earnings call on Thursday, April 25, Alphabet (GOOGL) reported better-than-expected first quarter earnings, a $70 billion stock buyback plan and — most intriguing of all — the approval of its first-ever dividend.
Shares of the company jumped nearly 15% in after-hours trading on the news, increasing Alphabet’s valuation by $196 billion, which marked its largest single-day gain since 2015.
According to Barron’s, the surge in valuation resulted in Alphabet becoming the fourth member of the $2 trillion market cap club (along with Microsoft, Apple and Nvidia) 947 days after breaching $1 trillion in market cap in July 2020.
How much will Alphabet’s dividend pay?
The dividend announcement was of particular interest to investors. In doing so, Alphabet now joins fellow “Magnificent Seven” companies Apple, Meta, Microsoft and Nvidia in providing shareholders with quarterly yield, leaving Amazon and Tesla as the only two companies in the cohort that do not.
The dividend is currently yielding 0.46%, or 20 cents per share, with all three classes of the stock — A, B and C — eligible to receive the payment.
Alphabet’s first distribution will occur on June 17 and will be paid to shareholders of record as of June 10, meaning investors must own the stock by that ex-dividend date in order to be eligible to receive the payment.
Earnings blew away forecasts
In their earnings call after the market closed, Alphabet announced earnings per share (EPS) of $1.89 and quarterly revenue of $80.5 billion, which beat forecasts of $1.50 and $78.7 billion by 25.61% and 2.34%, respectively.
This marks the fifth consecutive quarterly EPS beat for the company, and the fourth in a row that revenue has exceeded analysts’ expectations. The earnings beat marked a 15% year-over-year gain, good for $23.6 billion in net income, or profit, for the first quarter of 2024.
Shares of GOOGL are up 57% over the past year.
More from Money:
Are IPOs Good Investments? What to Learn From Reddit and Trump Stock Flops
The Dow Is About to Cross 40,000 for the First Time Ever
Since joining Money in 2023 as an investment editor, Jordan has specialized in a wealth of finance topics, ranging from traditional equities (stocks, mutual funds and ETFs), income investment vehicles and alternative assets to retirement savings, debt-based fixed-income securities and commodities, with a specific focus on gold and other precious metals. He takes pride in combining his personal interests and professional experience in finance and education to help readers increase their financial literacy and make better investment choices. Jordan has worked in digital publishing for 17 years after graduating from Lynn University as a member of both the Kappa Delta Pi International Honor Society and the U.S. Achievement Academy's All-American Scholar Program. He previously served as managing editor of Weiss Ratings, where he worked alongside a team of investment writers, editors and analysts to produce educational finance content and daily, weekly and monthly market news alerts. As a contributing writer for BetterInvesting Magazine, Jordan covered topics focused on the fundamentals of investing, technical and fundamental analysis, mutual funds, debt securities, dividend investing, retirement savings strategies and passive income generation. His bylines can also be seen in Apple News, Money Crashers, The Charlotte Observer, Fort-Worth Star Telegram and a dozen other newspapers.