Days ahead of Facebook's 20th anniversary, Meta, opens new
tab authorized an additional $50 billion in share repurchases and said its
quarterly dividend would be 50 cents per share.
The dividend would not change the total amount of capital
returned and introducing a dividend gives the company more
"flexibility," Meta CFO Susan Li said.
The new dividend plan would also mean a hefty payout for CEO
Mark Zuckerberg, who owns about 350 million Meta Class A and Class B shares.
The Facebook co-founder could get about $175 million every quarter.
"The returning of cash to shareholders is a bold and
well-regarded move. The amount of free cash pumping through the business means
it is more than able to afford it, and it helps pay investors for their
patience," Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown,
said.
Meta on Thursday flagged strong ad sales and a rebound in
user growth during its fourth-quarter results, while the social media giant
also forecast current-quarter revenue above analysts' estimates.
The company has been working at keeping costs low during the
last year, and let go of more than 21,000 employees since late 2022, with
Zuckerberg calling 2023 the "Year of Efficiency".
"We are impressed with strong results/guidance and
overall resiliency of Meta's advertising platform given macro wobbles, although
this reflects the meaningful investments in platform engineering and product
development," Baird analyst Colin Sebastian said.
The world's biggest social media company has been spending
billions of dollars over the past decade to boost its computing capacity for
generative AI products it is adding to Facebook, Instagram and WhatsApp, and to
hardware devices such as its Ray-Ban smart glasses.
Meta's shares trade at 21.29 times expected earnings,
compared with a forward PE of 83.85 for social media rival Snap, opens new tab,
20.38 for Alphabet, opens new tab, 40.51 for Amazon.com, opens new tab and
31.57 for Microsoft, opens new tab, according to LSEG data.
Meta is the fourth from the so-called "Magnificent
Seven" stocks to pay a dividend, with its yield of 0.51% matching that of
Apple, opens new tab.
Meta was on track to gain $171 billion in market value,
based on a premarket share price of $461.30, if gains hold.
"The 'Year of Efficiency' has paid off, with both
headcount and costs dropping, and Meta exceeding our expectations for full-year
2023 ad revenue," Jasmine Enberg, principal analyst at Insider
Intelligence, said.
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