Could Alphabet (GOOG) Be One of the Biggest Dividend Stocks in the Market?

Mega-cap technology firms aren’t always known for paying out huge dividends. A case in point would be Google parent company Alphabet (NASDAQ:GOOG), which isn’t the biggest dividend payer.

On the other hand, just because Alphabet isn’t a dividend all-star today, this doesn’t mean the company can’t become a dividend standout. Indeed, there are indications that Alphabet has what it takes to go from zero to hero in the world of dividend-paying tech titans.

Alphabet: A Dividend Newcomer

Over the years, GOOG stock has rewarded investors with powerful share-price appreciation. In the area of dividend payments, though, Alphabet is a relative newcomer with only a brief track record. 

To be more specific, Alphabet announced its first dividend payment in April of 2024. That dividend distribution was for $0.20 per share, which wasn’t much but at least it was a start.

Perhaps it was mainly a symbolic gesture for Alphabet toward the company’s loyal shareholders. Starting a dividend program seemed to send a message that Alphabet respects its investors and is maturing as a business.

Fast-forward to June of 2025, and Alphabet has authorized quarterly cash distributions for five consecutive quarters. The first four distributions were each for $0.20 per share, and the most recently authorized payout is for $0.21 per share, representing a 5% quarter-over-quarter increase.

I’ll admit, these aren’t jaw-dropping payouts. If the company continues to distribute $0.21 per share per quarter, that would amount to $0.84 per year. Hence, if we say that the GOOG stock price is around $175, then that would translate to a forward annual dividend yield of around 0.5%.

Chances are, you’re not going to get rich overnight from Alphabet stock’s dividends if the yield is only half a percentage point. Don’t fret, though, as there are signs that Alphabet could become a dividend superstar.

Alphabet Is Flush with Cash

For one thing, Big Tech businesses like Alphabet, Meta Platforms (NASDAQ:META), and NVIDIA (NASDAQ:NVDA) might be testing the waters with their relatively small dividends. Over time, these technology giants may choose to scale up their dividend programs.

Furthermore, it’s comforting to know that Alphabet can easily afford to increase its dividend payouts. Rest assured that Alphabet is well capitalized, having had $23.264 billion worth of cash and cash equivalents as of March 31, 2024.

Not only that, but Alphabet is an unstoppable revenue generator, which can help the company improve its capital position to pay dividends. During 2025’s first quarter, Alphabet recorded revenue of $90.234 billion versus $80.539 billion in the year-earlier quarter.

Plus, as of March 31, Alphabet had an astounding $475.374 billion in total assets and only $130.107 billion in total liabilities. From this, investors can deduce that Alphabet has sufficient capital to cover its expenditures.

Additionally, Alphabet is tremendously profitable, which should inspire confidence among dividend-seeking investors. For Q1 2025, Alphabet reported net income of $34.54 billion or $2.81 per share, as compared to $23.662 billion or $1.89 per share in 2024’s first quarter.

The upshot of this data barrage is that Alphabet is in a great position to hike its quarterly dividend distributions by more than 5% or even 10%. You never know when Alphabet’s board of directors might announce a big dividend hike, which would undoubtedly put the company’s shareholders in a positive mood.

A Rock-Bottom Payout Ratio

By now, you may have surmised that Alphabet’s current dividend payments are not only sustainable but have room for growth. The flood of encouraging financial figures from Alphabet will support this idea.

In case you’re not convinced yet, I’ll serve up another need-to-know statistic right now. In particular, Alphabet’s current and prospective shareholders ought to know the company’s dividend payout ratio.

A payout ratio is calculated by dividing a company’s dividend distribution by that company’s earnings (these can all be done on a per-share basis). In the case of Alphabet, we can focus on 2025’s first quarter and calculate the payout ratio as $0.21 per share divided by $2.81 per share, or 7.47%.

That’s an extremely low dividend payout ratio. I don’t start to become concerned that a company’s dividend is unsustainable until the company’s payout ratio exceeds 50%. So, a 7.47% payout ratio is easily manageable and suggests an abundance of room to the upside.

Taking Baby Steps

It’s not a question of Alphabet’s ability to hike its dividends, but only a matter of whether the company’s board is willing to do so. Quite possibly, the board could raise Alphabet’s dividends if the shareholders make their voices heard loudly and clearly.

Whether this actually happens remains to be seen. For now, it’s all about the baby steps as Alphabet recently raised its dividend by 5%, which is a decent start. If Alphabet’s dividend-hiking pace accelerates, GOOG could quickly become one of the biggest dividend stocks in the technology sector and elsewhere.

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