Meta surprised the stock markets by revealing its first quarterly dividend. This gesture, rare in the technology sector, could be emulated among other digital heavyweights such as Alphabet and Amazon. This is according to a team of analysts from Goldman Sachs, who see this trend as good news for investors looking for income.
Stock market: dividends, an asset for S&P 500 companies in 2024
S&P 500 companies are expected to pay more dividends in 2024, according to Goldman Sachs. Alphabet and Amazon could indeed imitate Meta and announce their first dividends Of the history.
Dividends represent a supporting factor for stock prices. They reduce the cost of capital and increase stock returns.
Why can Meta, Alphabet and Amazon afford to pay dividends?
In the stock market, Meta, Alphabet and Amazon are among the seven technology companies that will drive the growth of the S&P 500 during 2023.
Meta announced a dividend of 50 cents per share, payable on March 26. According to stock exchange data, it posted a net profit of $14.02 billion in the fourth quarter of 2023. This represents an increase of 201% year-on-year. The stock price jumped 20% the day after this announcement.
Alphabet and Amazon could follow the same path, according to Goldman Sachs. The latter believes that these companies have sufficient liquidity to pay dividends while continuing their investments in innovation.
Alphabet reported net profit of $22.3 billion in the fourth quarter of 2023, up 51% year-over-year. Amazon posted net profit of $8.9 billion, up 118% year-on-year.
In any case, the current trend in the stock market could be favorable to investors. To be continued…
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