Does Google Pay Dividends?

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Does Google pay dividends?

Well firstly, Google actually now trades under its parent company Alphabet Inc. (ticker symbol GOOGL).

As most people would know google is a company that operates transnationally and is know as a major source of cash flow.

It is common for companies of this size and market capitalization to pay a dividend to their investors.

However, Alphabet has never done so – making their dividend yield 0%.

Some investors say that their generous share buyback scheme is similar to that of a dividend. This is heavily criticized by many.

Why Does Google Not Pay A Dividend?

Google (Alphabet) is known as a growth company and as such the board trusts that shareholders will benefit markedly more from earnings being retained and used by the company to grow further.

Due to their ability to innovate, Google is an exciting stock for investors to trade in and out of as they have many ground-breaking projects underway.

One such project being that of driverless cars, which are set to be the next major consumer electronics product.

Whilst Alphabet has yet to officially announce its long-term plans regarding their business direction, it is likely that partnerships with well-known car brands will be a future prospect.

The thought of this has excited investors due to the enormous possible returns if the projects have a successful outcome.

Other areas of investment include smart contact lenses and balloons with internet connectivity that fly at high altitudes.

Another reason that the Google dividend is zero is because they need as much cash possible for acquisitions.

Since going public, Google has purchased over 150 companies, the largest being Motorola in 2011.

There are rumors that Google is looking to acquire large entertainment firms from the likes of Netflix to Twitter.

Since Google prefers to use cash to make acquisitions rather than using debt it is an attractive option for investors.

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Disclaimer: The information above is for educational purposes only and should not be treated as investment advice. The strategy presented would not be suitable for investors who are ...

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