Is Google Next to Offer a Dividend?

After Apple's dividend announcement last month, eyes are now on Google (Nasdaq: GOOG  ) for whether a shareholder payout is in its future. As of the latest quarter, Google has more cash as a percentage of market cap than its five largest competitors, including Apple; its cash holdings stand at $44.6 billion.

In fact, Google is the only tech company with a market cap above $125 billion that doesn't pay a regular dividend, making investors consider whether now is the time to expect a steady payout. Google's stock has fallen 1.5% this year, so a significant dividend yield would be welcomed by investors.

According to Bloomberg, Google is adding $2 billion to $3 billion in cash each quarter, although its recent purchase of Motorola Mobility Holdings (NYSE: MMI  ) for $12.5 billion will be a liquidity drain.

Google's CEO Larry Page was asked about Apple's dividend announcement last week, and he responded, "I think Apple has more cash than we do."

Business section: Investing ideas
Do you think it's time that Google offered its investors a steady payout, or does it have better uses for its cash?

Below we list the largest tech stocks that pay sizable dividends. Do you think Google should join them? (Click here to access free, interactive tools to analyze these ideas.)

1. Microsoft (Nasdaq: MSFT  ) : Develops, licenses, and supports a range of software products and services for various computing devices worldwide. The company has a market cap of $254.66 billion and stock priced at $30.98. Microsoft's dividend yield is 2.64% with a payout ratio of 25.77%.

2. China Mobile: Provides mobile telecommunications and related services primarily in mainland China. The company has a market cap of $216.85 billion and stock priced at $54.73. China Mobile's dividend yield is 3.78% with a payout ratio of 43.55%.

3. Intel (Nasdaq: INTC  ) : Engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. The company has a market cap of $139.47 billion and stock priced at $28.48. Intel's dividend yield is 3.02% with a payout ratio of 31.29%.

4. Siemens (NYSE: SI  ) : Operates in the industry, energy, and health care sectors worldwide. The company has a market cap of $87.21 billion and stock priced at $96.36. Siemens' dividend yield is 4.08% with a payout ratio of 40.81%.

5. Nippon Telegraph & Telephone: Provides telecommunications services to residential and business customers in Japan. The company has a market cap of $59.17 billion and stock priced at $22.33. NTT's dividend yield is 2.77% with a payout ratio of 40.92%.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


 

Kapitall's Alexander Crawford does not own any of the shares mentioned above. The Motley Fool owns shares of Intel, Microsoft, and Google. Motley Fool newsletter services have recommended buying shares of Microsoft, China Mobile, Google, and Intel, as well as creating a bull call spread position in Microsoft. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (2) | Recommend This Article (4)

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  • Report this Comment On April 13, 2012, at 7:57 PM, TrojanFan wrote:

    You are unlikely to see this happen after the odious stock split they just did.

    http://finance.yahoo.com/blogs/breakout/google-share-split-n...

    They basically just said to minority stakeholders, "Let them eat cake!"

    Why anyone would want to own shares in a company that treats its shareholders like 2nd class citizens is beyond me.

    Profit participation is only half of the stock ownership equation. Control rights are the other half and it's looking an awful lot like those are getting stripped away here. The $100 billion question is WHY?

    Google shareholders beware.

    This share split is going to be enormously destructive to shareholder value. I have a feeling that Google is about to embark on a very controversial change in strategic direction and this "stock split" is designed to preempt any risk of dissident shareholders launching a proxy fight against the founders in order to stop them. Why else would they do this???

    This move is designed to clear the deck in advance of any potential dissident action on the part of activist shareholders and any current shareholder should find that gravely concerning. This is a HUGE red flag.

    My hunch is that they are going to go headlong into devices and declare a head-to-head war with Apple using the Motorola platform. I think they are sick and tired of standing idly by and watching their Silicon Valley neighbor, Apple, mop up all the device margins in handsets and tablets. Motorola is going to be their platform of choice for going straight for Apple's throat, especially following Steve Jobs untimely passing last year.

    They are probably also going to throw Android licensees under the bus.

    I suspect their bet is going to be that users are more loyal to the OS then they are to the devices and that they'll all follow the OS onto the Motorolla platform. This will leave Samsung and HTC among many others out in the cold.

    But like they basically just told their shareholders...they don't care. Tough luck guys.

    If they are capable of treating their SHAREHOLDERS like this they are certainly capable of reneging on and abandoning their commitment to their handset partners. This company has proven over and over again that they are unworthy of trust and this is just the latest example.

    Proceed with caution.

  • Report this Comment On April 14, 2012, at 12:32 PM, funspirit wrote:

    I disagree with the above poster. There is no way that Google with throw the OEM's "under the bus" ... they do NOT benefit from it. they benefit more from getting users into their ecosystem, as described here in this column about GOOG digesting Motorola.

    http://www.richmakesyourich.com/2012/04/challenge-of-digesti...

    Good column, personally i feel that they will use Motorola to build a cheap tablet to compete with the Fire and integrate new users into the Google ecosystem. This is their goal, not to burn the OEMs

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