Does Google Pay Dividends? Looking Into Google’s First-Ever Payout

Does Google Pay Dividends?

Yes, Google pays dividends. On April 25, Google’s parent company, Alphabet (GOOGL), became the latest of the Magnificent Seven tech stocks to announce its first-ever dividend. The other dividend-paying companies in this cohort are Apple (AAPL), Microsoft (MSFT), Nvidia (NVDA), and Meta (META).

Google is one of the world’s most popular tech companies, synonymous with internet search. As such, Alphabet dividends have been much anticipated.

Google’s main products are search engine technology, computer software, artificial intelligence, quantum computing, and consumer electronics.

As of June 2023, Google’s market capitalization was $2.129 trillion. At the time of this writing, its share price was about $173.9.

So, how big is the company’s first dividend payment? When does Google pay dividends? Will they ever increase or stop making payouts to its shareholders? Learn in this article.

Table of Contents Table of Contents

1. Does Google Pay Dividends?
2. Key Takeaways
3. How Often Does Google Pay a Dividend?
4. Google's Dividend History
5. Will Google Ever Increase Its Dividend?
6. 4 Tech Stocks That Pay Better Dividends
7. What Are Dividends?
8. The Bottom Line
9. FAQs
10. References

Show Full Guide

Table of Contents

1. Does Google Pay Dividends?
2. Key Takeaways
3. How Often Does Google Pay a Dividend?
Show Full Guide
4. Google's Dividend History
5. Will Google Ever Increase Its Dividend?
6. 4 Tech Stocks That Pay Better Dividends
7. What Are Dividends?
8. The Bottom Line
9. FAQs
10. References

How Often Does Google Pay a Dividend?

Google announced its inaugural dividend payout on April 25, 2024, along with its first-quarter earnings results.

The first Google dividend will be $0.20 per share, likely to be distributed on June 17, 2024. The company has also announced that it will be paying dividends quarterly, but it hasn’t specified the exact months.

As such, the next Google stock dividend payment date is still unknown. However, given that the first payment will be in June, the second one could possibly be in September, in tandem with the company’s plans of quarterly payments.

Why Is Google’s Dividend Low?

Currently, Google’s dividend per share is quite low, at $0.20, compared to most other tech giants, such as Microsoft and IBM.

However, this could be because this is the first-ever dividend, which tends to be a little lower. This is done to test the waters and gauge shareholder reactions before deciding how much the next dividend should be.

Another key reason Google dividends are low and has shied away from announcing one so far is that it focuses more of its earnings on expansion into new ventures, such as Google Glass, driverless cars, and Google X.

Google has also always favored share repurchase programs over dividends, which have been praised for increasing the value of shares. This could also explain why current Google dividends are low.

Google’s Dividend History

There is no information about Google’s dividend history as of now since this is only the first dividend announced.

However, Google has a long history of share repurchase programs. It started buybacks in 2015, with the first one, on December 31, 2015, of $1.78 billion. The company’s most recent buyback was on March 31, 2024, of $15.70 billion.

The company currently has three classes of shares: Class A, Class B, and Class C. Google has also had three stock splits.

In July 2022, it had a 20-for-1 split for all share classes. A stock split in March 2014, however, only created the new Class C shares. In 2015, the company had a stock split for Class C shares, where shareholders got an extra 2.7455 shares for every 1000 Class C shares owned.

Google Stock Split History

Google’s Dividend Yield

The dividend yield ratio compares the amount of dividends a company pays with respect to its current share price. This ratio is important for investors to understand the returns they can expect from a stock and whether it would be worth picking.

The current Google dividend yield is 0.46%, which is considered quite decent. It is slightly below Apple’s 0.52% yield and a bit more than Meta’s 0.43%. However, it is still considerably lower than Microsoft’s 0.72% yield, as well as other tech companies such as Oracle at 1.37%.

However, the dividend yield ratio for some companies, like Nvidia’s 0.01%, can appear very low simply because their share price has risen significantly.

As such, investors will have to wait for further Google dividends to assess the company’s dividend yield.

Google’s Dividend Payout

The dividend payout ratio (DPR) looks at the amount of earnings a company is paying out as dividends as compared to its net revenue. A good dividend payout ratio is usually somewhere between 30% and 50%. The DPR is important to gauge whether a company is likely to keep being able to pay dividends.

!function(e,n,i,s){var d=”InfogramEmbeds”;var o=e.getElementsByTagName(n)[0];if(window[d]&&window[d].initialized)window[d].process&&window[d].process();else if(!e.getElementById(i)){var r=e.createElement(n);r.async=1,r.id=i,r.src=s,o.parentNode.insertBefore(r,o)}}(document,”script”,”infogram-async”,”https://e.infogram.com/js/dist/embed-loader-min.js”);

The DPR depends on the size of the company and its stage, with smaller startups usually choosing to reinvest more of their earnings back into the company, thus having a lower dividend payout ratio.

Since this is Google’s first quarterly dividend, there is no information about its DPR as of now.

However, according to WallStreetZen, Google’s earnings have grown at 26.69% per year, which is faster than the US internet industry. Thus, it will likely be able to keep paying dividends in the future.

Google’s Dividend Growth

Since Google has just announced dividends for only one quarter so far, there is no information about the company’s dividend growth at this time.

Will Google Ever Increase Its Dividend?

As this is Google’s first dividend, it is very likely that the company will increase its dividend down the line, perhaps in the next few months. This is especially true because Google’s current dividend is on the lower side of dividend-paying tech companies.

In today’s high cost of living environment, investors demand higher compensation for holding stocks for longer. As such, Google risks losing out on quite a few investors if it does not raise its dividend in tandem with its competitors.

However, since the company’s earnings and stock price have also been rising at a robust rate in the last few years, it is in a good position to raise dividends if and when it chooses to do so.

4 Tech Stocks That Pay Better Dividends

What Are Dividends?

Dividends are payments made to investors or shareholders of a company, as compensation for holding the stock, usually for several years. They are usually taken from the company’s net profits and are calculated on a per-share basis, with larger shareholders naturally receiving higher dividends.

Dividends can be paid in several ways, including property, cash, and stock. They are usually paid quarterly but can also be annually, half-yearly, or even monthly, depending on individual companies and their strategies.

Why Are They Important to Investors?

Dividends are important to investors as they represent long-term steady income, which can be used in various ways, such as for retirement, savings, emergencies, and growing the investment portfolio.

Companies see dividends as a way to reward long-term and loyal investors, especially those who have stuck with a company through tough times, instead of selling.

As such, dividend stocks can make a difference for investors who don’t want to invest excessively in potentially risky growth stocks.

The Bottom Line

Google is one of the biggest tech companies in the world today. It recently joined other dividend-paying tech stocks such as Apple, Nvidia, and Microsoft. The inaugural dividend amount is $0.20 per share.

Although it might be early to make such claims, Google can keep paying dividends and potentially increase them due to its robust earnings and strong share price appreciation.

FAQs