Meta’s move to start the payouts could signal an upcoming switch in investor mindset
Shareholders in Meta are about to start receiving a dividend for the first time. Most of them probably won’t notice. Investors will receive a piddling 50 cents per share each quarter, starting next month. Given the prevailing share price of the social media monster, this equates to an annual dividend yield of just 0.42 per cent. This sounds tiny. It is tiny. But this particular form of microdosing sent out a big signal, for the company and potentially for the wider market.
The practice has simply fallen from convention, especially among ambitious tech companies that plough earned dollars back into growth and development, and especially in the US. As long as stocks always go up, and, importantly, as long as bonds put up a feeble fight for investment dollars with their own low yields, this arguably does not matter. But dividend enthusiasts argue this is starting to change now that money has a cost again. Meta’s new small offering bolsters their case.