Meta Platforms (META -0.09%) has been on a tear since late July's results, as the company's strong results helped investors refocus on the strength of its ads business and its ambitious long-term artificial intelligence (AI) plans. The social-media and advertising company behind Facebook, Instagram, and WhatsApp also kept up a theme it started when it began ratcheting up its capital return program in 2021 (first with repurchases, followed by dividends a few years later): sharing more of its abundant cash with shareholders.
Meta's dividend is young and modest. But that does not make it a weak dividend stock. In fact, three core elements suggest the opposite: a conservative payout policy, a demonstrated commitment to ongoing cash returns, and business fundamentals that can support years of dividend growth.
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1. A small payout backed by huge, recurring cash flow
One area Meta's dividend is particularly attractive is when it comes to its ability to cover its dividend payment. In the second quarter of 2025, Meta generated about $8.6 billion of free cash flow (the cash flow left over after both regular operations and capital expenditures are taken care of) and paid $1.3 billion in dividends. That is roughly a mid-teens payout of quarterly free cash flow. The company also earned $18.3 billion of net income, putting the dividend at only about 7% of quarterly earnings -- a conservative setting that prioritizes durability.
Also helping, Meta ended the quarter with over $47.07 billion in cash, cash equivalents, and marketable securities, adding further flexibility.
These figures matter because they show the dividend is not stretching the balance sheet or crowding out investment.
2. Management already raised the dividend -- and is returning far more through buybacks
A good dividend stock is not just about the yield. It is about policy and behavior. Since declaring its first regular dividend late in 2024 at $0.50 per share, Meta increased the quarterly payout by 5% to $0.525 in February 2025 and has maintained that level through midyear. Beyond the dividend, Meta has been aggressive with repurchases. In the first half of 2025, it bought back over $23 billion worth of stock while paying about $2.7 billion in dividends over the same period. As of June 30, the company still had more than $28 billion remaining on its repurchase authorization, leaving ample capacity to keep shrinking the share count and boosting per-share results over time.
3. A resilient core business supports years of dividend growth
Why should investors expect this dividend to keep growing? The underlying business is strong and getting more efficient. In the second quarter, revenue rose 22% year over year to $47.52 billion, operating margin expanded to 43%, and earnings per share increased 38% to $7.14.
Additionally, engagement and monetization drivers looked healthy, with ad impressions up 11% and average price per ad up 9%.
Looking ahead, there's a lot to be upbeat about. The tech company is investing heavily in AI infrastructure, expecting $66 to $72 billion of 2025 capital expenditures and signaling another year of significant capex dollar growth in 2026. Yes, this is a risk, but Meta is doing this from a position of strength. In the company's second-quarter earnings call, Meta CFO Susan Li underscored that second-quarter free cash flow was $8.5 billion even after elevated capex.
These dynamics -- strong growth, healthy cash generation, and investments in growth opportunities -- support the case for steady dividend increases alongside continued reinvestment.
There are risks to watch, of course. Meta continues to flag active regulatory headwinds, particularly in Europe, where potential changes to its "Less Personalized Ads" offering could weigh on revenue. And the step-function in AI capex will pressure free cash flow in some quarters, especially if macro conditions soften. But the lucrative company and its dividend should fare just fine, even if it runs into unexpected legal expenses. The payout starts from a very low base with a small yield today -- roughly below 0.3% at recent prices -- because most of the shareholder return still flows through buybacks. For investors, that combination can be attractive: a cautious dividend that is already growing, paired with material repurchases funded by a high-margin, cash-rich core.
