Updated May 10, 2023 by Bob Ciura
Over the past decade, many technology stocks such as Apple, Inc. ( AAPL ), Cisco Systems ( CSCO ), and others have begun paying dividends to shareholders.
While the tech industry largely welcomes dividends, not all tech companies pay dividends. Another denier of paying dividends to shareholders is e-commerce giant Amazon.com Inc. (AMZN).
Instead of returning cash to shareholders, Amazon continues to invest its cash flow back into the company.
The decision of whether or not a company should pay a dividend depends on many factors. Thousands of stocks pay dividends to their shareholders, and a select few have long increased their dividends every year.
For example theDividend aristocratsis a group of 68 S&P 500 stocks that have raised their dividends for more than 25 consecutive years.
You can download an Excel spreadsheet of all 68 Dividend Aristocrats (including key financial metrics like price-to-earnings ratio and dividend yield) by clicking the link below:
Amazon's lack of a dividend certainly hasn't hurt investors so far, as Amazon has been a frontrunnerTech-Stock.
Over the past 10 years, Amazon stock has returned more than 20% annually.
But for income investors, Amazon may not be an attractive option because of thisNon-payment of dividend. This article is about the odds that Amazon will ever pay a dividend.
Business overview
Amazon is an online retailer that operates a massive e-commerce platform that allows consumers to buy almost anything from their computer or smartphone.
Amazon is oneMega-Cap Stockwith a market capitalization of over $1 trillion. The company operates in the following sectors:
- North America
- International
- Amazon Web Services
The North American and International divisions are the global consumer goods retail platform through the Company's websites.
Amazon's Web Services division sells subscriptions to cloud computing and storage services to consumers, startups, enterprises, government agencies, and academic institutions.
Amazon's e-commerce operations have fueled the company's massive sales growth over the past decade. Revenue reached $514 billion2022, a phenomenal growth over the past decade. Amazon saw impressive growth in 2022 as e-commerce demand continued to grow.
The company showed solid growth in the first quarter of 2023.
Those:investor presentation
Related:Which is the best investment: Dividend stocks or growth stocks??
In the firstquarterIn 2023, revenue of $127.36 billion beat analysts' estimates of $2.76 billion, while adjusted earnings per share topped $0.09 at $0.31. Net sales were up 9% year over year. Excluding currency movements, revenue was up 11% for the quarter.
By segment, North America segment revenue was up 11% year-over-year, while AWS revenue was up 16% and International segment revenue was up 1%.
Operating income rose 30% year over year to $4.8 billion. Adjusted earnings per share of $0.31 compared to a loss of $0.38 in Q1 2022.
Although the retail industry still has low gross margins, it continues to generate strong sales growth. Regardless, the AWS division is extremely profitable and is largely the reason behind Amazon's impressive earnings growth. Such strong earnings growth improves Amazon's chances of paying a dividend at some point in the future.
However, the company still plans to invest heavily in growth, which means earnings per share will vary from quarter to quarter.
growth prospects
As is common with many technology companies, growth investment is a top strategic priority for Amazon. This is partly out of necessity. In the technology industry, a highly competitive and cyclical industry, things move extremely fast. Tech companies have to invest large sums of money to stay on top.
Amazon is no different—the company is investing heavily to continue developing its online retail platform. Amazon continues to expand its retail business. alsoacquiredNatural and organic food retailer Whole Foods for nearly $14 billion. This gave Amazon the solid presence it wanted to further expand its reach into the food sector.
Amazon doesn't stop there. In addition to retail, the company plans to expand its reach into other industries, including media and healthcare. Amazon has built an extensive media platform through which it distributes content to its Amazon Prime members.
Creating original content is another highly intense endeavor, requiring huge sums of money for Amazon to compete with streaming giants like Netflix ( NFLX ) and Hulu, as well as other TV and movie studios.
With Amazon now dominating retail and media content, the company is gearing up for a potential entry into the healthcare industry. In 2018, AmazonacquiredOnline pharmacy PillPack for $753 million.
More recently, in 2022 Amazonwas announcedthe acquisition of One Medical in a $3.9 billion cash transaction, including One Medical's debt; One Medical is a national primary care company.
At the same time, Amazon continues to expand its presence in robotics, particularly in household products. Amazon recently announced its $1.7 billion cash acquisition of iRobot (IRBT), maker of the Roomba and other products.
These investments will boost Amazon's revenue growth, which is of primary interest to the company's investors. However, such aggressive spending will limit Amazon's ability to pay dividends to shareholders, at least for some time.
Operating income is expected to be between $0 billion and $4 billion for the second quarter of 2023, compared to $3.7 billion for the first quarter of 2022.
Will Amazon ever pay a dividend?
Amazon joins the ranks of profitable tech companies like Apple, Microsoft and Cisco that generate strong earnings per share. Apple, Microsoft and Cisco are nowBlue-Chip-Tech-Dividendenzahler.
In theory, Amazon could pay a dividend as the company should be profitable in fiscal 2023. Amazon's earnings per share areforecastfor fiscal year 2023 it will be $1.54.
The company can use its earnings for various purposes, including paying down debt, reinvesting in future growth initiatives, paying dividends or buying back shares.
If Amazon chose to do so, it could pay a dividend to shareholders, although an announced dividend payment would likely be small in terms of dividend yield.
For example, even if Amazon maintained a 25% dividend payout ratio, which would be reasonable for a growth-oriented tech company, its $0.385 per share dividend would only represent a yield of about 0.3%.
Additionally, Amazon's earnings and free cash flow are being squeezed by rising costs, making it highly unlikely that Amazon will pay a dividend anytime soon.
Final thoughts
There is no doubt that Amazon has been one of the most impressive growth companies in history. From its humble beginnings as an online bookseller, Amazon now dominates the online marketplaceretail industry. It is also a major cloud service provider, as well as a movie studio and content streaming giant.
Ultimately, a company must make the decision to issue a dividend payment. This often happens when future growth no longer requires such high investment. For Amazon, the company still has many new opportunities in mind for future expansion, including (but not limited to) multimedia content,Super Marketand health care.
Growth remains Amazon's top priority. Therefore, investors should not expect a dividend payment in the near future.
The following articles provide analysis of other stocks that do not currently pay dividends and whether they might be.
- Will JD.com ever pay a dividend?
- Will Shopify ever pay a dividend?
- Will PayPal ever pay a dividend?
- Will Pinduoduo ever pay a dividend?
- Will Adobe ever pay a dividend?
At Sure Dividend, we often advocate investing in companies that have a high probability of increasing their dividends each year.
If this strategy appeals to you, it may help to search the following databases of dividend growth stocks:
- TheList of Aristocratic Dividends: S&P 500 stocks with dividend increases for more than 25 years.
- TheList of aristocrats with a high dividend yieldconsists of the 20 Dividend Aristocrats with the highest current yields.
- TheList of dividend achievementsconsists of approximately 350 stocks with over 10 years of consecutive dividend increases.
- TheList of Dividend KingsIseven more exclusivethan the Dividend Aristocrats. It consists of 48 stocks with more than 50 years of consecutive dividend increases.
- TheList of High Dividend Yield Kingsconsists of the 20 currently highest paying dividend kings.
- TheList of blue chip stocks: Stocks that are considered "Dividend Winners", "Dividend Aristocrats" and/or "Dividend Kings".
- TheList of high dividend stocks: Stocks aimed at investors looking for top yields of 5% and above.
- TheList of monthly dividend stocks: Stocks that pay dividends every month, for 12 dividend payments per year.
- TheList of dividend champions: Stocks that have increased their dividends for more than 25 consecutive years.
Note: Not all Dividend Champions are Dividend Aristocrats, as Dividend Aristocrats have additional requirements, such as S&P 500 membership. - TheList of dividend candidates: 10-24 consecutive years of dividend increases.
- TheList of disputed dividends: 5-9 consecutive years of dividend increases.
Thank you for reading this article. Please send comments, corrections or questions to support@suredividend.com.
FAQs
Will Amazon ever pay a dividend? ›
AMZN pays a dividend of $0.20 per share. AMZN's annual dividend yield is 0.16%. Amazon's dividend is lower than the US industry average of 4.73%, and it is lower than the US market average of 4.37%. Is Amazon's dividend showing long-term growth?
Is Amazon going to pay a dividend? ›AMZN pays a dividend of $0.20 per share. AMZN's annual dividend yield is 0.16%. Amazon's dividend is lower than the US industry average of 4.73%, and it is lower than the US market average of 4.37%. Is Amazon's dividend showing long-term growth?
Why Amazon has no dividends? ›Amazon's business model has long centered on innovating and branching out into different corners of the market, as evidenced by its foray into the grocery and pharmacy business in recent years. As such, it's easy to see why Amazon doesn't choose to pay dividends -- it would rather use its money to grow as a company.
Is Amazon a good long-term investment? ›Amazon has been one of the best long-term investments of the past two decades.
What is the dividend for Amazon in 2023? ›Historical dividend payout and yield for Amazon (AMZN) since 2024. The current TTM dividend payout for Amazon (AMZN) as of June 08, 2023 is $0.00. The current dividend yield for Amazon as of June 08, 2023 is 0.00%.
How high will Amazon stock go? ›Stock Price Forecast
The 48 analysts offering 12-month price forecasts for Amazon.com Inc have a median target of 135.50, with a high estimate of 220.00 and a low estimate of 85.00. The median estimate represents a +9.74% increase from the last price of 123.47.
Amazon (AMZN) is one such stock that our proprietary system currently recommends. The company not only has a favorable Growth Score, but also carries a top Zacks Rank. Studies have shown that stocks with the best growth features consistently outperform the market.
Will Google ever pay a dividend? ›It stated in its most recent 10-K from early 2022 that it has no plans to pay a dividend for the foreseeable future. In its 10-K from 2022, Alphabet states that it hasn't paid a dividend since going public and continues: “The primary use of capital continues to be to invest for the long-term growth of the business.
Which company pays highest dividend? ›| Company | Dividend % | Dividend (INR) |
|---|---|---|
| NTPC Ltd. | 42.5 | 4.25 |
| HCL Technologies Ltd. | 900 | 18.00 |
| REC Ltd. | 32.5 | 3.25 |
| Hindustan Zinc Ltd. | 1300 | 26 |
| Name | Price | Analyst Price Target |
|---|---|---|
| IBM International Business Machines | $135.30 | $146.56 (8.32% Upside) |
| CVX Chevron | $158.86 | $188.58 (18.71% Upside) |
| EOG EOG Resources | $116.25 | $146.44 (25.97% Upside) |
| ET Energy Transfer | $12.74 | $16.86 (32.34% Upside) |
Where will Amazon stock be in 5 years? ›
Assuming that it meets analysts' expectations for 2024 and continues to grow its top line at a CAGR of 10% through 2027, it could generate over $850 billion in revenue by the final year. If it's still trading at about two times sales, its market capitalization could easily double to $1.7 trillion in five years.
Where will Amazon stock be in 10 years? ›With that in mind, there's a clear path for Amazon to achieve a $5 trillion valuation in the next 10 years. If it gets there, investors who buy its stock today would earn a whopping 371% return.
Will Amazon stock ever reach $10,000? ›Long term AMZN stock forecast
Similar to the short term AMZN stock price forecasts above, most analysts remain bullish for the long term although its worth noting, most longer term outlooks are more speculative. According to the experts, Amazon's stock could be between $4000 and $10,000 in the next decade.
Amazon's analyst rating consensus is a Strong Buy. This is based on the ratings of 36 Wall Streets Analysts.
How much will Amazon stock be worth in 2030? ›According to the latest long-term forecast, retrieved by Finbold on February 27, Amazon's price will climb above $320 in 2030 and hit $327 by the end of the year marking a 250% increase from today to the year's end.
What will Amazon stock be worth in 2024? ›According to the latest long-term forecast, Amazon price will hit $125 by the middle of 2023 and then $150 by the middle of 2024. Amazon will rise to $200 within the year of 2025, $300 in 2026, $350 in 2028, $400 in 2030 and $450 in 2033.
Can Amazon reach $1000 a share? ›By the end of 2023, projections are closer to $500 due to expectations following the current downturn. As you can see, most estimates believe Amazon will outperform the market for years to come. And I believe you will see Amazon stock back above $1,000 per share by 2025 or sooner.
What will Amazon stock be worth in 2 years? ›According to the long-term forecast of analysts from Traders Union, the price of Amazon will be $217.82 by the end of 2023, and then $270.72 by mid-2024. Over the next ten years, Amazon could reach $2900.15 (by December 2032).
What is the highest Amazon stock has ever been? ›Historical daily share price chart and data for Amazon since 1997 adjusted for splits. The latest closing stock price for Amazon as of May 17, 2023 is 115.50. The all-time high Amazon stock closing price was 186.12 on July 08, 2021.
What would $10000 invested in Amazon in 1997 be worth today? ›Amazon was the third of the four companies to go public, with its IPO in May 1997. At the time, the company was valued at $438 million and shares were priced at a pre-split price of $18 each. If you had invested $10,000 in Amazon back then, your investment would now be worth more than $2.2 million.
Can I buy 1 share of Amazon stock? ›
As with many companies today, investors can purchase fractional shares of Amazon. If you're interested in doing this, you'll want to make sure your brokerage offers fractional shares. Then, you'll want to purchase the fraction of a single Amazon share that's within your budget.
Is Apple a dividend stock? ›High Dividend: AAPL's dividend (0.53%) is low compared to the top 25% of dividend payers in the US market (4.94%).
Will Netflix pay a dividend? ›Historical dividend payout and yield for Netflix (NFLX) since 1971. The current TTM dividend payout for Netflix (NFLX) as of June 09, 2023 is $0.00. The current dividend yield for Netflix as of June 09, 2023 is 0.00%. Netflix is considered a pioneer in the streaming space.
Does Tesla pay a dividend? ›TSLA does not currently pay a dividend.
What are the 3 dividend stocks to buy and hold forever? ›| Stock | Forward Dividend yield |
|---|---|
| Goldman Sachs Group Inc. (GS) | 3.1% |
| 3M Co. (MMM) | 6.2% |
| Dow Inc. (DOW) | 5.5% |
| Walgreens Boots Alliance Inc. (WBA) | 6.2% |
| Dividend ETFs | Dividend Yield |
|---|---|
| Lockheed Martin Corporation (LMT) | 2.7% |
| Merck & Company, Inc. (MRK) | 2.6% |
| Air Products and Chemicals, Inc. (APD) | 2.6% |
| Automatic Data Processing, Inc. (ADP) | 2.4% |
- Cisco CSCO.
- Comcast CMCSA.
- Medtronic MDT.
- Gilead Sciences GILD.
- Duke Energy DUK.
- Blackstone BX.
- Truist Financial TFC.
- Phillips 66 PSX.
Can an investor really get rich from dividends? The short answer is “yes”. With a high savings rate, robust investment returns, and a long enough time horizon, this will lead to surprising wealth in the long run. For many investors who are just starting out, this may seem like an unrealistic pipe dream.
Do you pay taxes on dividends? ›Dividends can be classified either as ordinary or qualified. Whereas ordinary dividends are taxable as ordinary income, qualified dividends that meet certain requirements are taxed at lower capital gain rates.
How many dividend stocks should I own? ›There is no hard and fast rule for how many dividend stocks to start a portfolio, but a good starting point is to aim for a minimum of 10. This will give you a good mix of different companies and sectors and help to diversify your risk.
How much will Amazon be worth in 2025? ›
| Year | Prediction | Change |
|---|---|---|
| 2025 | $ 199.34 | 60.35% |
| 2026 | $ 252.42 | 103.04% |
| 2027 | $ 319.64 | 157.11% |
| 2028 | $ 404.75 | 225.57% |
One of the best reasons to invest in Amazon is its swiftly growing cloud computing business with Amazon Web Services (AWS). The platform boasts a leading 34% market share, with the industry worth $368.97 billion and expected to see a compound annual growth rate (CAGR) of 15.7% until 2030.
What is Amazon stock price prediction for 2050? ›Amazon stock price prediction 2050 after spilit
Amazon stock price prediction 2050 highest price $2500, and the lowest price will be $ 2100 in 2250. In comparison to previous years, these prices are significantly higher. This stock will maintain an average price of $2300.
| Year | Price in the middle of the year | Average growth, % per year |
|---|---|---|
| 2034 | $299.54 | +240% |
| 2035 | $315.42 | +256% |
| 2040 | $382.34 | +331% |
| 2050 | $524.74 | +487% |
The emergence of Amazon Web Services has increased the company's valuation. Due to the combination of businesses, the stock is difficult to value. Its current valuation is historically low as growth has slowed and profits have weakened.
Will Amazon stock hit $5,000? ›The analyst has a price target of $5,000, which represents a potential 57% return from Amazon's current trading price of $3,175. Let's dig deeper to determine if this is a reasonable expectation. Image source: Amazon.
What is Amazon stock prediction? ›The average price target for Amazon is $134.24. This is based on 36 Wall Streets Analysts 12-month price targets, issued in the past 3 months. The highest analyst price target is $165.00 ,the lowest forecast is $111.00.
Is Amazon a buy or sell? ›AMZN Signals & Forecast
The Amazon stock holds a sell signal from the short-term moving average; at the same time, however, there is a buy signal from the long-term average. Since the short-term average is above the long-term average there is a general buy signal in the stock giving a positive forecast for the stock.
While many companies that issue stocks pay dividends on a regular basis (with some even steadily increasing their dividends through the years), Amazon doesn't pay dividends to shareholders.
Could Amazon stock reach $1,000 again? ›By the end of 2023, projections are closer to $500 due to expectations following the current downturn. As you can see, most estimates believe Amazon will outperform the market for years to come. And I believe you will see Amazon stock back above $1,000 per share by 2025 or sooner.
Is it safe to invest in Amazon shares? ›
But, with such great size, comes a set of unique risks. The biggest risks of investing in Amazon.com, Inc. (NASDAQ: AMZN) stock are increasing competition, profit potential uncertainty, revenue growth uncertainty, speculative valuation and share price volatility.
How much to get $1,000 in dividends? ›Reinvest Your Payments
The truth is that most investors won't have the money to generate $1,000 per month in dividends; not at first, anyway. Even if you find a market-beating series of investments that average 3% annual yield, you would still need $400,000 in up-front capital to hit your targets.
(GOOG) No Dividend | Seeking Alpha.