01-31-2019, 07:07 PM
What will be the next S&P 500 component to transition from growth mode to a mature company that needs to find other ways to return profits to shareholders (like dividends)? Apple made the transition several years ago, and looks set to be a solid DGI pick for years to come. Who do you think will be next? AMZN, FB, GOOG/GOOGL? How growthy can an $840 Billion market cap company like Amazon be before antitrust, regulatory, or other pressures rein it in? eWalmart (AMZN) is my pick for S&P 500 component not currently paying a dividend that will do so first. I think shareholders will ultimately demand it. Two of AMZN's largest revenue segments, retail (online sales) and AWS, are segments that have a lot of dividend paying company in the S&P (WMT, TGT, MSFT, ORCL, IBM). They are also the types of business that should generate fairly reliable profit streams capable of supporting a dividend.
Don't know that such a transition will necessarily be a good thing for the underlying stock price in the short term immediately after such an announcement. AAPL's price action was pretty choppy and sustained to the downside for about six months after it announced that it was initiating a dividend (for the first time in nearly two decades) in July, 2012, while the S&P 500 continued its general uptrend. That said, people who jumped on the opportunity to buy AAPL in the $60s in 2013 have seen some substantial price appreciation and roughly a doubling of their initial dividend payout.
Anyone else have any thoughts as to which S&P 500 component is likely to make a transition from growth to DGI mode?
Don't know that such a transition will necessarily be a good thing for the underlying stock price in the short term immediately after such an announcement. AAPL's price action was pretty choppy and sustained to the downside for about six months after it announced that it was initiating a dividend (for the first time in nearly two decades) in July, 2012, while the S&P 500 continued its general uptrend. That said, people who jumped on the opportunity to buy AAPL in the $60s in 2013 have seen some substantial price appreciation and roughly a doubling of their initial dividend payout.
Anyone else have any thoughts as to which S&P 500 component is likely to make a transition from growth to DGI mode?