E When Will Amazon Initiate A Dividend?

Amazon (AMZN) has the third largest market cap in the stock market. Its market cap marginally crossed the $1.0 T threshold a few months ago and now stands at $731 B due to the recent correction of the stock. This market cap is only slightly lower than the market cap of Microsoft (MSFT) and Apple (AAP). As these two tech giants have been paying dividends for years, it is only natural that some income-oriented investors wonder when Amazon will initiate a dividend?

Business overview

Amazon offers a gigantic e-commerce platform, which lets consumers purchase almost everything with their computers or smartphones. Amazon operates in three segments: North America, International and Amazon Web Services. The first two segments include the global retail platform of consumer products while the third segment provides cloud computing and storage services to consumers and enterprises.


Amazon has consistently grown its revenues at an impressive pace every single year for more than a decade. During the last decade, the company has grown its revenues more than 10-fold, from $19.2 B in 2008 to $221.0 B in the last 12 months. Notably its earnings performance has been extremely volatile. Between 2008 and 2015, Amazon did not grow its earnings per share, which remained at an almost negligible level.

The vast majority of the companies that are listed in the stock market make great efforts to grow their earnings per share consistently and thus satisfy the analysts and their shareholders. Amazon is a great exception, as it has not paid any attention to its bottom line results. Instead the online giant has always focused exclusively on the long-term growth of its earnings. This focus has begun to bear fruit in the last three years. During this period, Amazon has grown its earnings per share more than 10-fold, from $1.25 in 2015 to an expected $19.79 this year. Even better, there are absolutely no signs of fatigue, as the online giant is expected to grow its earnings per share by another 35% next year, to $26.69.

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