Will Pinduoduo Ever Pay A Dividend?

Pinduoduo (PDD) operates an e-commerce platform in China. This platform offers a wide range of consumer products, such as apparel, shoes, bags, childcare products, food and beverage, agricultural products, and electronic appliances.

Pinduoduo benefits from the strong growth of the Chinese economy, whose GDP has grown more than 6% per year for more than a decade. The company also benefits from a secular trend, namely the shift of consumers from conventional shopping to online shopping.

Pinduoduo has greatly rewarded its shareholders since its IPO, in mid-2018. Since then, the stock has rallied more than 5-fold and is now a large-cap stock with a market cap above $150 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.

Income investors may have missed the exceptional returns of Pinduoduo, as the company does not pay a dividend. This is fairly common among growth stocks, particularly those in the technology sector.

Income-oriented investors who are attracted by the massive returns of Pinduoduo probably wonder whether the company will pay a dividend anytime soon.

Business Overview

Pinduoduo operates a mobile e-commerce platform in China, with a wide range of products. This platform has become a mainstream online shopping application.

Pinduoduo benefits from the secular shift of consumers from brick-and-mortar shopping to online shopping. This trend has accelerated this year thanks to the coronavirus crisis and the resultant social distancing lifestyle. It is also worth noting that Pinduoduo has become the largest online platform for agricultural products in China by enabling direct selling from farms to the dining table.

Thanks to its impressive growth, Pinduoduo has attracted 731.3 million active buyers in the last 12 months, after just a few years of operation.

Source: Investor Presentation

Pinduoduo also has 643.4 million monthly active users and is still growing its customer base at a tremendous pace.

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