👉 Background: Google first launched in 1998 as “Backrub”, but since that naming-faux pas, it has become the leader in pretty much everything it does - from internet search to YouTube, Google Maps, Gmail and Chromecast.

👉 What happened: Now, Google has received the A+ mark from investors after beating investor expectations for sales, profit and even advertising revenue for the most recent quarter. As part of this update, Google also announced its very first dividend of 20 US cents per share, while buying back $70 billion USD worth of shares.

👉 What else: The dividend announcement clearly got investors feeling pretty giddy as Google's shares spiked 16% and its market capitalisation jumped to over $3 trillion USD.

What's the key learning?

💡As companies mature and profits grow, the expectation to pay dividends also rises.

💡There are two main reasons why many companies don’t pay a dividend. Either they can’t afford to give cash back to shareholders or they would prefer to use that cash to invest in company growth.

💡 But Google can't use either of those excuses anymore. Its parent company had $108 billion in cash and marketable securities on hand as of March 2024 as well as free cash flow of $69 billion in 2023. So it’s about time that Google gave back some of the spoils of its business to investors.