Alphabet Shares Jump 14% On Earnings Beat, First-Ever Dividend (cnbc.com) 94
Alphabet has reported first quarter results that topped analysts' estimates with soaring profits in its cloud division. It also announced its first-ever dividend. CNBC shares the results: Earnings per share: $1.89 vs. $1.51 per share expected by LSEG
Revenue: $80.54 billion vs. $78.59 billion expected by LSEG
Wall Street is also watching several other numbers in the report:
YouTube advertising revenue: $8.09 billion vs. $7.72 billion expected, according to StreetAccount.
Google Cloud revenue: $9.57 billion vs. $9.35 billion expected, according to StreetAccount.
Traffic acquisition costs (TAC): $12.95 billion $12.74 billion expected, according to StreetAccount.
Alphabet's revenue increased 15% from $69.79 billion a year earlier, the fastest rate of growth since early 2022. Alphabet said its board approved a cash dividend of 20 cents per share to be paid on June 17, to stockholders of record as of June 10. The company said it "intends to pay quarterly cash dividends in the future."
Revenue: $80.54 billion vs. $78.59 billion expected by LSEG
Wall Street is also watching several other numbers in the report:
YouTube advertising revenue: $8.09 billion vs. $7.72 billion expected, according to StreetAccount.
Google Cloud revenue: $9.57 billion vs. $9.35 billion expected, according to StreetAccount.
Traffic acquisition costs (TAC): $12.95 billion $12.74 billion expected, according to StreetAccount.
Alphabet's revenue increased 15% from $69.79 billion a year earlier, the fastest rate of growth since early 2022. Alphabet said its board approved a cash dividend of 20 cents per share to be paid on June 17, to stockholders of record as of June 10. The company said it "intends to pay quarterly cash dividends in the future."
You know what this means, right? (Score:4, Insightful)
We can never, ever expect them to fix Google search
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YouTube Premium (Score:3)
I'm surprised that they're getting that much ad revenue from YouTube. Doesn't everybody use adblock?
Not the at least 80 million people [blog.youtube] who pay for Youtube Premium.
YT Premium includes ad-free YT Music, so I imagine some people find the pricing competitive to Spotify.
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Things are bad when Yandex gives more accurate results.
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If you find what you want on the first attempt, you will view fewer ads.
Google's optimal strategy is to figure out what you want, then show you something tantalizingly close so that you make several more attempts to zero in. That maximizes ad views but doesn't suck enough for users to abandon Google and switch to an alternative search engine.
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Things are bad when Yandex gives more accurate results.
If you find what you want on the first attempt, you will view fewer ads.
Google's optimal strategy is to figure out what you want, then show you something tantalizingly close so that you make several more attempts to zero in. That maximizes ad views but doesn't suck enough for users to abandon Google and switch to an alternative search engine.
As conspiracy theories go, that one sounds petty plausible although I think they've gone a quite bit overboard with the ad revenue maximising shitty searches. It's a delicate balance. However, it's not just milking users for ad revenue. Yandex does, for example, actually give better image search results than Google and quite often even coughs something up when Google draws a blank.
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It's much worse than that. Google's main strategy has somewhat recently become to look into your search (including all the data they have on you), see what ad they can pitch to you based on that search and deliver that instead of a search result.
And for a while you used to be able to just go to page 3 or so and still find that search result you wanted. Nowadays, they don't even let you see the "billions of results" they quote. They just give you a few pages of mostly pitching things to you, and that's that.
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Little low, but not terrible.
Know how I know you're talking shit?
Because you don't know what a dividend payout ratio is
It's not the fraction of the market value of the fucking stock lol
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Corporations use payout ratio to decide how reasonable the dividend is, which is the ratio of the dividends per share to the earnings per share.
That in this case is around 10%.
The most you'll ever see is about 40%- in any company.
So the most you could ever see from Alphabet is a yield of 0.48%, which wouldn't make one bit of a difference to you unless you had billions in their stock.
For a company to have a yield of 7%, they must have a very low valued stock.
Tha
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What are you babbling about?
They authorized a 20 cents/share dividend. Stock was trading at $157/share.
If they pay it quarterly it would be 80 cents/year, thats a yield of 0.5%.
Also known under technical term as "fucking trash".
Nobody gives a fuck about payout ratio because the yield is pathetically low.
Re: Nano-dividend (Score:2)
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You are poor and not part of this conversation.
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If they pay it quarterly it would be 80 cents/year, thats a yield of 0.5%.
Also known under technical term as "fucking trash".
To be fair, half a percent is actually only slightly below the average for tech-sector stocks right now. AAPL is paying 24 cents quarterly on $170 (.565%), and the Fidelity Nasdaq Composite Index Fund (FNCMX) has a forward dividend yield of 0.64% annually.
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That is 10%, which is in the normal range.
Yield is something wannabe daytraders look at.
IT stocks are not held for dividends. Do some quick math. You'd need a billion dollars in stock to even pull a mediocre income in dividends.
For a company like Alphabet to have a reasonable yield ratio (let's say, 3%, again, not something they would give a fuck about, as they don't se
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What about XOM's 3% dividend yield? Or Franklin BSP Realty Trust at 11.67% according to a web search?
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The dividends stay decent there, because the growth potential of the stock isn't great against competing stocks.
The reason they can afford high dividend yields, is because their profit margin is fucking obscene- as high as 50-60%.
The reason that's the case, is because they're in the business of getting society to subsidize as much of their extraction of a resource as possible, and then selling us the fruit of our alrea
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You are dumb and should be ashamed of your stupidity.
Realty Trusts are required by LAW to distribute 90% of their profits as dividends.
They are not scams, they are, in fact, one of the most reliable sources of income for wealthy people.
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You are dumb and should be ashamed of your stupidity.
This tells me you're about to say something stupid.
Realty Trusts are required by LAW to distribute 90% of their profits as dividends.
Nobody called them a scam. Maybe you should learn to read? .9+ because they are highly illiquid.
They're required to have a payout ratio of
Further the 90% rule is on EPS- net.
A well run (maximizing tax incentives) will keep enough depreciating assets to reduce the EPS to near-zero. (see DLR)
They are not scams, they are, in fact, one of the most reliable sources of income for wealthy people.
Some are reliable, and very non-lucrative. Some are more lucrative, and less reliable.
You're talking out of your ass.
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REITs - Real Estate Investment Trusts pay 90% because they are classified as "pass-through entities." Those types of investments are meant for income generation or preservation in a tax sheltered entity (like an IRA). They are taxed as ordinary income because the REIT didn't pay taxes on that stream.
On the other hand, more typical stocks, Chevron, Intel, and so on, pay dividends that are "qualified." It's effectively a double taxation (plenty of info about that). 15-20 years ago that was given a little reli
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REITs - Real Estate Investment Trusts pay 90% because they are classified as "pass-through entities." Those types of investments are meant for income generation or preservation in a tax sheltered entity (like an IRA). They are taxed as ordinary income because the REIT didn't pay taxes on that stream.
Correct... mostly.
The REIT itself is tax-exempt, but it may be investing in taxed financial instruments, like MBS.
On the other hand, more typical stocks, Chevron, Intel, and so on, pay dividends that are "qualified." It's effectively a double taxation (plenty of info about that). 15-20 years ago that was given a little relief to the recipient by qualifying at a lower tax rate. I blend those types of stocks in my taxable portfolio for some risk neutralization.
Correct...
Why to y'all have to get so mad about this? Different classifications for reasonable different reasons and uses.
Not mad. Discussion about whether or not it's stupid to compare something like an REIT to a blue chip to a FAANG corp, with regard to dividend yield.
I'm trying to point out that individuals that are criticizing the corporation for the yield ont he FAANG stock are missing the point, as the payment ratio is still 10-40% of the EPS. Valuation of a stock, which the yield is based upon, i
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You missing the point.
The companies that pay a dividend basically announce "we give up, this is as good as its gonna get and we can't grow any more".
The yield coupled with buybacks is there to shore up the stock price.
Real companies that are on growth path don't do dividends, they re-invest revenue back and actually create a net loss on purpose, not to pay any taxes.
Google is, and has been, on a decline. Their workforce is stale. Their ideas are old. Their search engine is a basically an A/B tester for mark
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So you can say it until you're blue in the face, but it's simply wrong to anyone who can look at a stock ticker, lol.
Alphabet (Score:3, Interesting)
I'm still amazed that company manages to accomplish anything. Seems like it's largely by accident.
such yield, very profit (Score:2)
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Re: such yield, very profit (Score:2)
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Dividend yield is a number used by those trying to see how much money they can make from their investment.
That's not the business' problem.
The dividend payout ratio on the stock is just fine. It's about 10% of the earnings per share.
Google would have to make a truly fucking stupid amount of money to have a yield ratio of anything appreciable. That's normal for any company with a high stock price.
Re: such yield, very profit (Score:2)
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Why they bother? Because the stock performs 4x better than one with a higher dividend.
High-yield dividend stocks pay ~6%, or a payout ratio of ~40%. These are businesses that aren't expanding anymore.
And they've also had stable values for the last 30 years.
Apple pays 0.57%.
This is how I know you have no idea what you're talking about.
Re: such yield, very profit (Score:2)
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0.57% is a larger yield than 0.12%.
0.57% is still a tiny yield.
It's so tiny in comparison to large yield holdings, that it's not even worth distinguishing between those two numbers.
You don't hold Apple or Google for dividends. You hold it for the stock valuation.
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The average stock price for the 9 highest dividend yields on the S&P 500 is $45.
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Re: such yield, very profit (Score:2)
Dividend per share / share price.
It literally has everything to do with the share price by definition.
Re: such yield, very profit (Score:2)
I never said this.
Re: such yield, very profit (Score:2)
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They set it by earnings per share.
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Of course you don't have to, but in general, you do.
You seem like a somewhat average intelligence individual. You can quickly pull some data and plot dividend yields to stock price. If you need help identifying the correlation, let me know.
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Now, stop deflecting.
I see you earned that bad karma
Re: such yield, very profit (Score:4, Insightful)
Dividends and profit have nothing to do with share market value.
A company is valued by looking at its revenue, its costs (profit is revenue minus costs) and it's growth potential.
If someone invests money in a stock they expect either the value of the company to go up due to growth or a dividend from the profit or hopefully both.
It's not rocket science. If a company is growing because they're plowing all their profit into expansion to fuel greater future revenue then their value and price will go up even though they're not paying a dividend. Obviously a company with a high stock price that stops growing and doesn't make any profit so doesn't pay a dividend won't have a high stock price for very long so your correlation is mostly correct. Saying that dividends and profit have nothing to do with share market value is completely insane though.
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A company is valued by looking at its revenue, its costs (profit is revenue minus costs) and it's growth potential.
Nope.
If someone invests money in a stock they expect either the value of the company to go up due to growth or a dividend from the profit or hopefully both.
Yes.
It's not rocket science.
It very much is, and that's why you're not rich.
If a company is growing because they're plowing all their profit into expansion to fuel greater future revenue then their value and price will go up even though they're not paying a dividend.
No. That's demonstrably not how it works.
Obviously a company with a high stock price that stops growing and doesn't make any profit so doesn't pay a dividend won't have a high stock price for very long so your correlation is mostly correct.
Obviously.
Saying that dividends and profit have nothing to do with share market value is completely insane though.
They don't, because you've stared contrary evidence directly in your face and ignored it.
Stock value is largely psychologically set, as someone elsewhere in this thread lamented.
We live in a world where $44 billion dollar companies are unprofitable.
And while that's the more extreme demonstration, and we can just write it off as Musk being either a superhero, or a fucking moron, you can also just p
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You cannot make your revenue/profit->stock price association math work with that, period. That's because that stock value became divorced from any connection to that corporation's profit a long time ago.
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I've always been fascinated at the high valuation of non-voting, non-dividend-paying shares.
Kind of defeats the original selling points of stocks.
For retail, it enables them to indulge the gambling desire.
For Wall Street, they feed on the transaction fees and the trading.
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Re: such yield, very profit (Score:2)
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It makes sense that people don't care about dividend yield on stocks that have rates of return north of 20%, though.
As crazy low as Alphabet's yield is, their payment ratio is still 10%- 10% of their net goes to dividends.
The highest you'll ever see that is 40%. Maybe 50% in suspicious circumstances.
If you want a higher yield from Alphabet, you'll need their stock to greatly devalue, one way or another.
Re: such yield, very profit (Score:2)
I began migrating out of DRIP's years ago, when it became clear that even the short-term capital gains tax liability on the nominal company-paid fees was more than I'd pay a broker.
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I've always been fascinated at the high valuation of non-voting, non-dividend-paying shares.
You can make money on the stock in more ways than dividends. For example, Alphabet is also buying back stock. People who invested at a lower stock price and now sell back at the higher have made money. Normally, buybacks tend to concentrate control of a company into fewer hands, but, since these are already non-voting stock, in this case, it doesn't change this.
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Apparently firing people does indeed bring riches: https://tech.slashdot.org/stor... [slashdot.org]
Maybe next time they'll fire a few more to get the divs per share up a bit?
Google products (Score:1, Interesting)
- Internet search
- Youtube
- Cloud computing
- Android ecosystem
Only the cloud portion is new in the last 10 years. Every other Google product introduced since 2010 has been either not meaningful to the revenue numbers or a failure.
Google is really just a slow moving company making a huge profit with stale products.
Long list of discontinued Google products: https://en.wikipedia.org/wiki/... [wikipedia.org]
AI will likely not count for much revenue since it will be a race to the bottom cost and a commodity service.
Re: Google products (Score:2)
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Literally everything else. Bing is meh but works. Yandex post split into the Dutch company for the West and Russian for the East has been better than google on the Western side. Even Ecosia doesn't suck all that bad any more.
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It used to be you could remember an obscure sentence off the top of your head and find the source with google. Now you canâ(TM)t even if you try and search it as a quote.
Funny, I searched Google for "Now you canâ(TM)t even if you try and search it as a quote" (also, please fix your "smart quotes") and your post was the only result. Seems like you CAN search an obscure sentence and find the exact page it is on without news and products.
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Also email and gsuite. Those don't seem to be going anywhere, but given gsuite is a suite, they kill off parts of it with no real replacement making the whole thing less useful.
Also the cloud computing stuff isn't new in the last 10 years, it's 16 years old now.
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Those aren't Google's products.
Here are a list of Google's innovations in 2018. Warning: it will hurt your soul.
https://www.wordstream.com/blo... [wordstream.com]
Google finally realizes they aren't a startup (Score:5, Insightful)
When a company starts paying stock dividends, it means they recognize that shareholders no longer believe they will earn enough return on their investment in stock shares alone. This is a normal part of the life cycle of a large business, but it certainly is a turning point.
Re: Google finally realizes they aren't a startup (Score:3)
It also means that the directors of the company no longer believe they can utilize capital as well as they have in the past. Which, if you ask me, is terrible news to hear about a tech company. Hey, bid up the stock price on impressive revenue or profits, sure, but tell me a 25-year-old company is declaring a dividend for the first time,
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Google is an advertising company that occasionally develops some technology to support that. They've expanded to the point where they're dominant in pretty much all advertising except old fasioned print, TV and radio, and they're attracting a lot of anti-trust attention. Their growth is probably hitting its ceiling so dividends aren't necessarily a bad idea. Their actual payout is too small to be much more than symbolic though.
Even something that could be more accurately called a tech company is eventually
Re: Google finally realizes they aren't a startup (Score:2)
They are pretty much necessarily a bad idea. Irrespective of the argument above as to what it says about the company moving forward, there is also no less tax-efficient way for investors to realize returns than dividends.
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If you're a company that's run out of ideas for new things to do with your income, giving it to investors isn't a bad idea. That's dividends. "Tax efficient" is between you and your government.
Companies have a natural lifetime. While they're growing, paying dividends is a bad idea. When they're mature, it's a good idea.
Re: Google finally realizes they aren't a startup (Score:2)
So the tax inefficiency of dividends is not only every shareholder's business, but again, also pretty much a bad idea.
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Companies need to return the money they make to their investors sometime. Dividends are how that happens. Unless you like the "tax efficiency" of liquidation.
It's funny. Loads of people are in the "OMG, not paying dividends is the root of all evil in the world!" Less frequently you run into your type, "OMG, dividends are stupid and awful!"
Neither is true.
Re: Google finally realizes they aren't a startup (Score:2)
You know, as long as we're talking about "my" government, my point is all the stronger for foreign investors, who generally pay no U.S. taxes on capital gains at all, but do pay 30% on dividends.
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Both Microsoft and Apple have been paying dividends for over 10 years. Do you think that if you invested in those 2 companies 10 years ago and held, you'd be happy with the returns + dividends?
Re: Google finally realizes they aren't a startup (Score:2)
Dividend marks the turning point (Score:2)
Exactly. A tech company institution a dividend is the signal that innovation-based growth is ending. Add Google to the list: IBM, HP, Microsoft, Cisco, Oracle, Apple
I can't tell if you're joking (Score:2)
Exactly. A tech company institution a dividend is the signal that innovation-based growth is ending. Add Google to the list: IBM, HP, Microsoft, Cisco, Oracle, Apple
Apple is a darling of financial performance and innovation. Microsoft is doing amazing lately on similar fronts, especially in gaming and cloud services. Your list is not meaningful. Apple & MS don't have a lot in common with Oracle, IBM, and HP in regards to industry perception or performance in their sectors. Most perceive Oracle, IBM, and HP to be legacy players at this point, especially in their core offerings.
I personally wish more tech companies offered dividends...so everyday consumers ca
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Anybody can give themselves "dividends" from a non-dividend paying stock, no day trading or exceptional long-term planning required. Every year, or quarter, or whatever you like, just sell x%. In most respects it's the same thing that would happen if the company actually issued a dividend.
The disadvantage is that you'll probably have to pay a fee for the sale. The (big) advantage is that in many places sales are capital gains while dividends are income, and capital gains is usually taxed less.
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Stock transactions are free.
Qualified dividends which is most ordinary companies like Apple, MS, etc., are federally taxed at
- 15% for up to 553,000 income (married joint)
- 0% for up to 89,000 income (married joint)
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Lol, maybe for you.
I assume this is in the US. I'm not American, many people are not. Many people are also not married. If you read carefully, you might have noticed phrases such as in many places and usually.
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For Apple and Microsoft, "innovation" is a marketing buzzword that they use in their advertising.
For Microsoft, I do give them credit for funding ChatGPT and then incorporating it into their own platform. That's actual innovation. Apple completely missed that boat, but they did spend a lot of money on self-driving car tech. Oh wait... Uh, foldable phones? USB-C support? Oh, they did manage to get people to care about blue and green bubbles, nobody else does that! I'm sure there's something important I misse
When you're the leader... (Score:2)
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You keep using the word "innovative." I don't think it means what you think it means. What you actually described, is the transition of an innovative company, to a stable, mature company. The latter can be a market leader. "Innovative" by definition means *not* subtle refinements, but bold, breaking changes.
I laughed out loud when you said "Apple is way ahead in most categories." By every *objective* measure, apple is lagging behind others. They are playing catch-up. Google was late to AI, Apple completely
enshittification works (Score:5, Interesting)
This is precisely why Raghavan acted the way he did.
enshittification works.
squeezing from your customers and maximizing your monopolistic power while doing nothing innovative works.
when you're big enough it works for quite a while.
Funds Require Dividends (Score:2)
I remember hearing years ago that some mutual funds had rules that they could only invest in stocks that paid dividends. Is that still a thing? Putting out such a tiny dividend suggests to me that they might be gaming that system to allow those funds to invest in the stock.
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There are all kinds of mutual funds and ETFs that make dividends part of their screening. Nothing has changed. This could bring Google into the mix for a small group of them though screening, as defined by the prospectus, may have other criteria such as yield and dividend growth. Those parts take many years to fall into the screen. But yeah, Google may get indexed in a few more funds. It's not magic or anything or they could have done it a long time ago. They are already indexed into the S&P 500, Large