Alphabet, also known as Google’s parent company, has finally decided to start paying dividends. This announcement came on the heels of their first-quarter earnings report. Shareholders of Class A, Class B, and Class C shares will receive a payout of $0.20 per share, with the payouts scheduled to continue quarterly.
CFO Ruth Porat stated that this new dividend policy is part of Alphabet’s overall capital return program. The annual dividend yield is currently around 0.4%, totaling $9.9 billion in the first year with 12.4 billion shares outstanding. Additionally, Alphabet has increased its stock buyback program to $70 billion, up from $62.2 billion in the previous year.
This move towards paying dividends reflects Alphabet’s growth and maturity as a company. Similar steps were taken by Microsoft in 2003 and Apple in 2012, which are now considered strong income investments. Alphabet has now joined the ranks of megacap tech companies with active dividend programs.
It is important to note that Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Alphabet, Apple, and Microsoft. They also recommend certain options related to Microsoft.