Google’s morphing into Alphabet also made this company more complicated to some investors, and the reality is that Larry Page and Sergey Brin are truly in control with their own team in place to run the show here. Before thinking that they deserve a bash, we still have to consider that Alphabet/Google shares have risen handily — up about 40% since the end of 2014 alone.
The addition of Ruth Porat as chief financial officer was another move to get the company further along with adult supervision, and some market pundits have speculated that a Google dividend’s time has arrived. The reality is that Alphabet, or whatever you want to call it, has done more than just well for investors, and paying a dividend is solely up to a handful of people.
Investors need to keep in mind a serious issue about Google or Alphabet, above the name identity crisis some of us still have with it. No outside pressure can influence one iota of directional change if Larry and Sergey don’t want something to be done, even with the new business team.
Shares of Alphabet were trading at $735.55, within a 52-week trading range of $503.48 to $798.69. The consensus analyst price target is $860.69.
On its own after buckling to activist pressure to spin PayPal back out of the company, eBay Inc. (NASDAQ: EBAY) is now a slower growth Internet auction and marketplace services provider than in years past, and the long-term upside for PayPal is no longer for the benefit of eBay. Some have even speculated that Jack Ma of Alibaba could want eBay (good luck on regulatory and eBay customer backing).
There is just one problem in trying to predict that eBay will become a great dividend machine. eBay’s 2014 annual report said that it does not anticipate paying cash dividends in the foreseeable future. That being said, it fought the PayPal breakup call at first too.
On top of holding lots of cash, eBay is valued at a mere 13 times expected 2016 earnings. If growth is slowing and the company already has unlocked value, a dividend just makes sense here. eBay also has been a fairly aggressive buyer of its shares in the past via stock buyback authorizations.
Shares of eBay have been changing hands at $26.49. The consensus analyst target is $30.48. The 52-week range is $22.11 to $29.83.
In this past video game console upgrade cycle, Electronic Arts Inc. (NASDAQ: EA) has won handily. Its shares were up above $70, above previous all-time highs seen in 2004 or 2005. They were under $20 less than three years ago. EA has been public since 1989 and has split multiple times, and it looks to have generated over 100-times total return since its initial public offering.