Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is in the spotlight today after reporting its quarterly results. Driven by the artificial intelligence (AI) frenzy, the company announced its first-ever quarterly dividend of 20 cents per share, payable to shareholders of record as of June 10. In addition to the Google stock dividend, the company also announced that it would spend $70 billion on share buybacks.
More About Alphabet’s Initial Dividend and Share Buybacks
The Google stock dividend will be 80 cents per share annually, which equates to a rather small dividend yield of 0.5%. For comparison, the average S&P 500 dividend yield is about 1.35%. Nonetheless, the tech giant may raise its dividend yield over the longer term.
Ultimately, its yield could rise closer to the 3.3% payout that Cisco (NASDAQ:CSCO) boasts. GOOG’s payout may ultimately even rival IBM’s (NYSE:IBM) 3.9% yield. On the other hand, GOOG may emulate Apple (NASDAQ:AAPL), which resumed paying a dividend in 2012 after a long hiatus and now has a 0.57% yield.
Those who own GOOG stock as of June 10 will receive the payout on June 17.
Also importantly, the firm disclosed that it intends to buy back another $70 billion of GOOG stock.
Alphabet Delivered Better-Than-Expected Q1 Results
The tech giant generated sales of over $80.5 billion last quarter, well above analysts’ average estimate of $78.5 billion. GOOG’s top line surged 15% versus the same period a year earlier. Its net income soared 57% year-over-year to $23.7 billion, coming in well above analysts’ mean outlook of $19.1 billion.
GOOG’s strong performance was enabled by a “strong performance from Search, YouTube and Cloud,” CEO Sundar Pichai stated. Moreover, the firm’s “leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation,” Pichai reported.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
