Published: February 1, 2024 at 6:41 PM ET
Meta Platforms Inc. surprised Wall Street on Thursday by paying its first-ever dividend. This is perhaps Silicon Valley’s most monumental dividend decision since Apple reinstated its dividend more than a decade ago, and could light a fire under other tech giants.
Meta Inc.’s META will pay a quarterly dividend of 50 cents a share starting in March, joining Apple AAPL and Microsoft Corp. MSFT as Big Tech dividend payers. If CEO Mark Zuckerberg is keen on this move, it means…
Meta Platforms Inc. surprised Wall Street on Thursday by paying its first-ever dividend. This is perhaps Silicon Valley’s most monumental dividend decision since Apple reinstated its dividend more than a decade ago, and could light a fire under other tech giants.
with meta
meta
The company will join Apple in paying a quarterly dividend of 50 cents per share starting in March.
AAPL
and Microsoft
MSFT
Among Big Tech dividend payers. CEO Mark Zuckerberg’s willingness to make the move could increase investors’ calls for Alphabet to do the same.
google
Google
and Amazon.com Inc.
AMZN
,
There are two technology holdouts that predate the meta.
Meta’s dividend plan could further raise the stock’s profile on Wall Street, with the committee selecting it as a component of the Dow Jones Industrial Average DJIA. Dow candidates are no longer required to issue dividends, but paying dividends could certainly help Mehta’s resume.
Currently, Salesforce.com is the only stock in the Dow Jones Industrial Average.
CRM
And Boeing.
BA
Does not pay dividends. Boeing suspended its stock buyback program in 2020. Ultimately, decisions regarding new entrants to the Dow are at the discretion of the index committee, but the communications services sector, which includes Meta and Amazon, is underweight on the Dow compared to the S&P 500 SPX. It becomes.
read more: Why you can expect the Dow to change in February
Investors have already welcomed the news, with Meta shares surging nearly 15% in after-hours trading after the earnings release on Thursday afternoon, pointing to the dividend news as well as Meta’s “year of efficiency” paying off. This was further evidence that.
Mehta was asked about dividends only once on a call with Wall Street analysts. Chief Financial Officer Susan Lee said the dividend gives the company a more balanced capital return program and greater flexibility. Share buybacks will continue to be the largest component of Meta’s capital return program.
Dividends “do not change the way we determine the total amount of capital we return,” Lee said. “We also expect share buybacks to remain our primary method of returning capital to shareholders.”
During the conference call, Meta executives talked about the company’s opportunities in artificial intelligence and the company’s expected significant spending on expanding its data center infrastructure in 2024.
While Meta’s mature approach to shareholder returns may earn more respect from some investors, others see the flip side of paying dividends for the tech giant: personal glory, bravery. There is a possibility that you may be nervous about your healthy days. A rapidly growing company is over.
Meta has become a truly grown company, and investors will need to accept both sides of the issue.
