Alphabet and Amazon to introduce dividends in 2024, following Meta.

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The news that Meta Platforms Inc is introducing its first-ever dividend has sparked optimism among income-oriented investors, showing potential for other big tech companies to follow suit. According to a team of analysts at Goldman Sachs Group, fellow Magnificent Seven members Alphabet Inc. and Amazon.com Inc. are well positioned to introduce dividends of their own this year.

The interest in dividend-paying stocks has increased ever since Meta announced its first-ever quarterly dividend earlier this month. This has prompted Goldman’s team to raise its forecast for the S&P 500 dividend-per-share payout to 6%, up from 4% previously. The fact that the largest U.S. companies have generally surpassed Wall Street’s expectations when reporting their earnings from the final three months of 2023 is another factor driving the Goldman team’s dividend optimism.

Meta’s share price soared 20% the day after the company announced a quarterly dividend of 50 cents a share, payable March 26. This move, along with their report of blowout earnings growth, suggests that dividend-paying stocks and tech companies may be in a strong position to grow and attract new income-oriented investors. This signals confidence about future earnings and could further strengthen the stock market in 2024.

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