Will DoorDash Ever Pay A Dividend?

DoorDash (DASH) has attracted the focus of the investing community, fresh off its initial public offering at $102 per share on December 9th, 2020. The stock has already rallied over 50%, just one week after its IPO.

As a result, DoorDash is already a large-cap stock with a market capitalization above $50 billion. We have compiled a list of over 400 large-cap stocks in the S&P 500 Index, with market caps of $10 billion or more.

The impressive rally of the stock has resulted from rising enthusiasm about the growth potential of the company, which is in the very early stages of a multi-year growth trajectory.

Income investors may have missed DoorDash’s rally as the company just performed its IPO and it does not pay a dividend. The absence of a dividend is fairly common among growth stocks, particularly those in the technology sector.

Income-focused investors who are attracted by the impressive return potential of DoorDash probably wonder whether the company will pay a dividend anytime soon.

Business Overview

DoorDash was founded in 2013, when it launched a website displaying menus from local restaurants in Palo Alto, California. Since then, the company has grown to a huge marketplace, which connects more than 390,000 merchants, more than 18 million consumers, and one million users who use its logistics platform. Its platform enables local brick-and-mortar businesses to thrive in the current demanding business landscape, in which consumers focus on ease and convenience.

Technological advances have dramatically changed the behavior of consumers, who have become remarkably demanding with regard to convenience. Consumers now demand products and services inexpensively and quickly, at the touch of a button.

This shift, which has greatly accelerated this year due to the coronavirus crisis, has completely changed the business landscape for local businesses, which were used to offer personalized experience only at their stores. DoorDash has filled this gap with its platform, which helps merchants satisfy the needs of consumers and thus increase the number of their customers.

There are more than 30 million small businesses in the U.S., which play a major role in the economies of suburban areas. Those small businesses, along with the franchisees of large national or international chains, have created approximately two-thirds of the net new jobs in the U.S. over the last two decades. They thus represent a gigantic market for DoorDash.

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Disclosure: Sure Dividend is published as an information service. It includes opinions as to buying, selling and holding various stocks and other securities.

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