How Much Will Alphabet Pay Out in Dividends in 2025?

Source The Motley Fool

Earlier this year, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) joined fellow tech giants like Apple, Meta Platforms, and Microsoft in becoming a dividend stock. The move may have been a signal to calm investors' fears that generative artificial intelligence threatens its most valuable property, Google Search, which has an estimated 90% market share for Internet searches.

So, let's examine Alphabet's dividend, its growth potential, and how it rewards shareholders in another way.

Here is Alphabet's dividend information

In August, Alphabet announced its first-ever quarterly dividend of $0.20 per share, totaling $0.80 per share annually, with a dividend yield of 0.47%.

When a company issues a dividend, investors typically want to ensure it can support these payments without straining its cash reserves. Alphabet's strong financial position -- boasting $82.4 billion in net cash -- indicates it can comfortably cover dividend payouts, which are projected to cost the company nearly $10 billion annually.

For any dividend-paying stock, a key metric to monitor is its payout ratio, which shows what portion of earnings is paid out as dividends. Alphabet's payout ratio is a modest 5.2%, notably lower than other tech giants like Apple, Meta Platforms, and Microsoft.

Given Alphabet's healthy balance sheet and low payout ratio, investors can reasonably anticipate potential increases in its dividend over time. However, management has not signaled how much of a dividend increase is due.

GOOGL Payout Ratio Chart
GOOGL Payout Ratio data by YCharts.

Here's what else Alphabet is doing for shareholders

Alongside its steady dividend, Alphabet is aggressively repurchasing its own shares, which effectively returns capital by increasing each shareholder's ownership stake. Over the past five years, management has reduced the company's outstanding shares by 11% and recently committed to a $70 billion share repurchase program. In the most recent quarter alone, Alphabet invested $15.3 billion in buybacks, bringing the total to $46.7 billion in buybacks for the first three quarters of 2024.

Should you invest $1,000 in Alphabet right now?

Before you buy stock in Alphabet, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $912,352!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of November 4, 2024

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Collin Brantmeyer has positions in Alphabet, Apple, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Apple, Meta Platforms, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
What is SEI? Why did Binance, Coinbase, and OKX all list SEI coin simultaneously?Sei is a new Layer-1 public chain, and the launch of its token SEI can create new opportunities.
Author  Mitrade
Aug 16, 2023
Sei is a new Layer-1 public chain, and the launch of its token SEI can create new opportunities.
placeholder
Bitcoin CME gaps at $35,000, $27,000 and $21,000, which one gets filled first?Prioritize filling the $27,000 gap and even try higher.
Author  FXStreet
Aug 21, 2023
Prioritize filling the $27,000 gap and even try higher.
placeholder
Natural Gas sinks to pivotal level as China’s demand slumpsNatural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
Author  FXStreet
Jul 01, Mon
Natural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
placeholder
Market Expert: Not Long On XRP? You’re ‘Disrespecting’ YourselfAnalysts continue to believe in the potential price surge of XRP, predicting that it is still feasible that the crypto will hit the $3 mark.
Author  NewsBTC
Dec 06, Fri
Analysts continue to believe in the potential price surge of XRP, predicting that it is still feasible that the crypto will hit the $3 mark.
placeholder
Nearly $3 Billion in Bitcoin and Ethereum Options Expire Today Amid Mixed Market SentimentToday, approximately $3 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are set to expire, creating significant anticipation in the crypto market.Expiring crypto options often leads to notab
Author  Beincrypto
Dec 06, Fri
Today, approximately $3 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are set to expire, creating significant anticipation in the crypto market.Expiring crypto options often leads to notab
goTop
quote