Big Tech Opens the Floodgates - Following Meta, Alphabet and Amazon May Initiate Dividend Payments
In light of highly favorable results during the fourth quarter for Alphabet and Amazon, combined with the uncontested success of Meta's dividend announcement among investors, Goldman Sachs suggests that these Big Tech companies, which have so far abstained from paying dividends, may be encouraged to start.
Beyond Meta Platforms, the parent company of Facebook, which had previously announced the commencement of dividend payments, shareholders of American Big Tech corporations were delighted by Goldman Sachs' speculation that Alphabet and Amazon may also decide to distribute profits.
METAM’s STOCK VALUE INCREASES BY A FIFTH POST ANNOUNCEMENT
The two giants significantly surpassed analysts' consensus profit expectations in the fourth quarter, according to investment bank reports noted by MarketWatch. Amazon delivered an annual profit of $30.4 billion last year, while Alphabet, known as the parent company of Google, generated a profit of $73.8 billion.
In the aftermath of Meta's announcement of a 50-cent quarterly dividend scheduled for March 26, the company's shares surged by no less than 20% on the news.
Moreover, alongside the dividend announcement, Meta reported a net profit of $14.02 billion for the fourth quarter, equivalent to $5.33 per share, in contrast to the $4.65 billion, or $1.76 per share, profit a year earlier.
The investors' reaction was so favorable that Goldman believes this example may find even more followers. Consequently, in their latest forecast, the analyst team has raised the expected annual dividend yield of the wide-ranging S&P 500 index (SPX) stocks from 4 percent to 6 percent relative to their share prices.
ONLY ONE COMPANY CUTS ITS DIVIDEND
This move could signal confidence in future earnings and attract a new group of income-focused investors, wrote the Goldman analyst team led by David Kostin.
Since the beginning of the year, the bank noted that 56 S&P 500 companies have decided to increase their dividends - on average by 6 percent - while Walgreens Boots Alliance is the sole index member reducing its payout.
METAM’s STOCK VALUE INCREASES BY A FIFTH POST ANNOUNCEMENT
The two giants significantly surpassed analysts' consensus profit expectations in the fourth quarter, according to investment bank reports noted by MarketWatch. Amazon delivered an annual profit of $30.4 billion last year, while Alphabet, known as the parent company of Google, generated a profit of $73.8 billion.
In the aftermath of Meta's announcement of a 50-cent quarterly dividend scheduled for March 26, the company's shares surged by no less than 20% on the news.
Moreover, alongside the dividend announcement, Meta reported a net profit of $14.02 billion for the fourth quarter, equivalent to $5.33 per share, in contrast to the $4.65 billion, or $1.76 per share, profit a year earlier.
The investors' reaction was so favorable that Goldman believes this example may find even more followers. Consequently, in their latest forecast, the analyst team has raised the expected annual dividend yield of the wide-ranging S&P 500 index (SPX) stocks from 4 percent to 6 percent relative to their share prices.
ONLY ONE COMPANY CUTS ITS DIVIDEND
This move could signal confidence in future earnings and attract a new group of income-focused investors, wrote the Goldman analyst team led by David Kostin.
Since the beginning of the year, the bank noted that 56 S&P 500 companies have decided to increase their dividends - on average by 6 percent - while Walgreens Boots Alliance is the sole index member reducing its payout.
