Meta, the parent company of Facebook, has announced that it will be paying a quarterly dividend for the first time and has authorized a $50 billion share buyback program. This move aligns Meta with other tech giants such as Apple, Microsoft, and Oracle, who already have regular dividend payouts.
The decision to introduce a dividend is seen as a way for Meta to create a more balanced capital return program and provide added flexibility in how they return capital in the future. Chief Financial Officer Susan Li explained during the company’s earnings call that the dividend will be subject to market conditions.
Meta’s fourth-quarter financials exceeded expectations, both in terms of revenue and profit. This positive news, combined with the announcement of the dividend and share buyback program, caused Meta’s stock to rise by more than 14% in after-hours trading.
The dividend, which will be 50 cents per share, will be paid in March to all shareholders of record as of February 22nd. This move is expected to attract more investors and provide an additional incentive for existing shareholders to hold onto their shares.
Meta’s stock has been on a remarkable upward trajectory, with its market capitalization nearly tripling in 2023. The company’s stock price surpassed its previous record from 2021 just last month. Currently valued at $1 trillion, the expanded $50 billion share buyback program represents approximately 5% of Meta’s outstanding shares. As of December, the company had $30.9 billion available for share repurchases.
It is worth noting that not all tech giants pay dividends. Neither Amazon nor Alphabet have ever paid a dividend. Microsoft started issuing dividends in 2003, while Oracle initiated its dividend program in 2009.
Overall, Meta’s decision to introduce a quarterly dividend and authorize a significant share buyback program demonstrates the company’s confidence in its financial position and its commitment to returning capital to shareholders. With its stock price soaring and a strong financial performance, Meta is positioning itself as a leader in the tech industry and an attractive investment opportunity for shareholders.