Will PayPal and Airbnb start paying dividends?


IMPORTANT POINTS:

  • Research firm Wolfe Research identified some stocks like PayPal that could offer dividends in the short term.
  • Several renowned technology companies have started delivering dividends this year, such as Meta and Salesforce.
  • Morgan Stanley also stated that there is a good chance that PayPal will pay dividends soon, due to its good financial health.

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In April of this year, Google parent Alphabet announced that it would begin paying its first dividend of 20 cents per share to its investors. Previously, Meta and Salesforce had communicated the same thing.

These decisions revolutionized the market and, at a certain point, put pressure on other technology giants to continue with this process of paying dividends.

As a result of this, the research company Wolfe Research mentioned some companies that could be close to offering dividends to their shareholders.

“ We are excited that they have started, but we are also excited about the opportunity for them to increase their dividend over time ,” Wolfe highlighted.

PayPal, the favorite to pay dividends

Wolfe’s strategists conducted market research and determined those companies that could begin offering dividends soon.

They are characterized by having a strong free cash flow performance and because they are currently returning capital to investors through share repurchases.

That’s why PayPal emerged as a top pick, as it has an estimated free cash flow for the company’s return of 7% by 2024, according to Wolfe’s analysis.

Its shares have barely risen 1.2% so far this year and 20 of the 47 analysts covering the firm say buy now. The estimated average potential increase is 22% for the rest of 2024.

Morgan Stanley has also said that PayPal could begin offering dividends soon, because it has a “net cash position and sufficient free cash flow to sustain and self-fund the initiation of [a dividend.”

On the other hand, Wolfe analysts also highlighted Airbnb, whose shares accumulate a gain of almost 8% in 2024.