Is Alphabet a Good Dividend Stock?

Group 1: Core Insights - Alphabet has initiated dividend payments for the first time, joining other tech giants like Salesforce and Meta Platforms [1] - The company has a market capitalization exceeding $2 trillion, enabling it to pay dividends [1] - Alphabet's free cash flow (FCF) in Q1 was $16.8 billion, significantly higher than IBM's $1.9 billion for the same period [2] Group 2: Financial Performance - Alphabet's total revenue in Q1 was $80.5 billion, with advertising sales contributing $61.7 billion [2] - YouTube generated $8.1 billion in advertising revenue in Q1, up from $6.7 billion the previous year [4] - Google Cloud sales reached $9.6 billion in Q1, an increase from $7.5 billion in 2023 [4] Group 3: Dividend Considerations - Alphabet's dividend is set at $0.20 per share, yielding 0.5%, which is lower than IBM's yield of 3.8% [5] - The company plans to pay quarterly cash dividends but lacks a historical track record for dividend increases [5] - Alphabet's competitive strength in the cloud market is notable, holding an 11% market share compared to IBM's 2% [6] Group 4: Growth Potential - Alphabet is investing in artificial intelligence, integrating it into its search engine and YouTube [6] - The company's strong financials, FCF generation, and rising revenue position it as an excellent growth stock despite its lower dividend yield [6]