FAANG Dividends: Finally Happening?

Likely initiates, payout ranges and impacts on DIPs

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Tech companies have, for years, pushed back against the idea of initiating dividends. Consistent double-digit earnings growth and a lack of pressure on the sector to consider dividends has allowed these companies to avoid an initiation.

However, with balance sheets swelling faster than these companies can make use of the capital and demand from investors for more disciplined use of capital, is it time for tech giants to consider dividends?

We estimate that 36 of the 55 largest US tech companies could potentially payout a combined annual dividend of $56.5 billion.

This whitepaper explores:
  • A realistic dividend - what does it look like?
  • Impact of FAANG dividends on DIPs
  • Trade-offs between growth and dividends
  • Change in management ownership and attitude towards initiating dividends

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