From Nasdaq: 2024-09-16 05:45:00

Amazon (NASDAQ: AMZN) has yet to offer a dividend, despite its massive market cap of $2 trillion. With $89 billion in liquidity and $53 billion in free cash flow, many wonder why the company has not initiated payouts like other tech giants.

While Amazon could afford a dividend, it seems unlikely to follow suit with Alphabet and Meta’s recent examples. The company’s share count has increased by 6% in the past five years, indicating a preference for share issuance over dividends.

Despite having the financial means to pay dividends, Amazon’s management appears to believe they can use cash more effectively than shareholders. The company’s share repurchase program further supports this notion, with Amazon remaining a net issuer of shares despite authorizing buybacks.

Investors should not expect Amazon to change its dividend philosophy anytime soon. The company’s focus on expansion through share issuance and limited use of its share repurchase program point to a continued absence of dividends for shareholders.

The Motley Fool’s Stock Advisor team has identified 10 best stocks for investors to buy now, with Amazon not making the list. Investors looking for potential high returns may want to consider other opportunities outside of Amazon.



Read more at Nasdaq: Prediction: Amazon Will NOT Become the Market’s Next Dividend Stock, and This Is Why