Interesting idea from Breaking Views in Friday’s Telegraph: “Google Needs To Grow Up And Pay A Dividend”. Personally, I’d love to see that. Last year net income was $6.2 billion and free cash flow $5.6 billion. They also had $15.8 billion in cash and short term investments on their balance sheet at the end of the year.
Why not pay out, say, $1 billion a year in dividends? With 315.3 million shares oustanding as of Jan 31, 2009, that would be $3.17 a share per year resulting in a dividend yield around 1%. That would be a good start and another little enticement to owning shares.
Disclosure: Top Gun is long shares of Google (GOOG).