The company behind Google, Alphabet Inc., announced on Thursday that it will begin distributing dividends to all of its stockholders at a rate of 20 cents per share. The company's financial plan revolves around a massive $70 billion stock repurchase program, which is the main component, rather than fresh investments. After Google released its first-quarter profits, which exceeded the company's projections, the stock saw a 15% increase. The announcement followed immediately by Alphabet's earnings results.
‘Our results in the first quarter reflect strong performance’: Pichai
With regard to the February history of shaped dividend declarations, Alphabet Inc. is currently poised to take Meta's lead. YouTube, Cloud, and Search all had excellent first-quarter performances, according to our data. Our Gemini period is well underway, and the entire organization is moving forward quickly. Sundar Pichai, CEO of Alphabet Inc. and Google, said, "Our leadership in AI research and infrastructure, along with our global product footprint, position us well for the next wave of AI innovation."
With $108 billion in cash and marketable securities as of the end of March 2024, Alphabet has a strong financial position that offers a stable platform for such shareholder-friendly initiatives. This announcement's timing is especially significant because it falls on the same day as Alphabet's previous authorization for the repurchase of stocks in an amount equal to one year ago. All share classes will receive a portion of Alphabet's dividend, including super-voting Class B shareholders and non-voting Class C shareholders. Remarkably, Class A shares are held by the vast majority of Google stockholders. All stockholders who were registered as of June 10 are expected to receive the dividend, which will be distributed that same month.
For Alphabet's co-founders, this payout has major implications
With more over 730 million Class B and C shares, Sergey Brin is expected to get paid an incredible $146 million. Larry Page, who owns 389 million Class B shares, is going to get paid $78 million in dividends. Investors have been closely monitoring the tech sector, looking for indications of stability and maturity. Major tech companies have started to lay off employees and cut their budgets since 2022. Investors have reacted favorably to the start of dividends and share buybacks as well as to these austerity measures.
The announcement of Meta's dividend earlier this year caused its shares to rise by more than 14%. The fact that Amazon hasn't authorized a share buyback or paid a dividend on the same magnitude as Google makes it stand out. The largest repurchase authorized by Amazon to far was a $10 billion purchase in 2022.
