On Thursday, April 25, 2024, Alphabet’s board said the company would introduce a 20 cent per share quarterly dividend. This is the company’s first-ever dividend. After Alphabet, which owns Google and YouTube, announced the dividend, shares rose by over 15% during after-hours trading.
Who’s set to benefit?
This dividend will be payable to shareholders of all share classes, including the super-voting Class B and non-voting Class C shareholders. Most Alphabet shareholders own Class A Shares. As of June 10, 2024, all shareholders of record will receive the dividend the same month.
Co-founder Sergey Brin will get a $148 million dividend payout every quarter, while co-founder Larry Page will receive $156 million. Sergey Brin owns roughly 739 million Class B and C shares, while Page owns around 779 million Class B and C shares.
The introduction of this dividend is particularly interesting as it follows the tail of Meta Platforms (Facebook) and Salesforce introducing a dividend in early 2024. After Meta announced its dividend, its share price soared over 14%.
Alphabet and Meta are both part of the Magnificent Seven, a group of high-flying technology companies known for their growth instead of their dividends.
This is the list of Magnificent Seven companies, broken down by which ones pay a dividend:
- Microsoft — quarterly dividend of $0.75
- Apple — quarterly dividend of $0.24
- Nvidia — quarterly dividend of $0.04
- Alphabet — quarterly dividend of $0.20 (new, announced in April 2024)
- Meta Platforms — quarterly dividend of $0.50 (new, announced in March 2024)
- Amazon — no dividend
- Tesla — no dividend
This is the list of tech companies that have announced new dividends so far this year:
- Alphabet (April 2024) — Announced $0.20 quarterly dividend
- Meta Platforms (March 2024) — Announced $0.50 quarterly dividend
- Salesforce (March 2024) — Announced $0.40 quarterly dividend
- Booking Holdings (March 2024) — Announced $8.75 quarterly dividend
Investors are looking for increasing signs of maturity from technology companies. It will be interesting to observe whether other technology companies will continue the trend of introducing their first-ever dividends. Goldman Sachs analyst David Kostin predicted that Alphabet and Amazon would begin paying dividends in 2024. Is Amazon next? We believe the growing number of tech companies paying dividends is a boon for investors looking to generate additional income from their portfolio of growth stocks.
