Alphabet’s Class C shares pay a tiny, well-covered dividend — a growth holding, not an income one. The $0.22 quarterly dividend ($0.88 annualized) is 13.7% of fiscal 2025 free cash flow and the balance sheet is in a net-cash position. Alphabet initiated the dividend in April 2024 at $0.20 a quarter, raised it to $0.21 in 2025 and to $0.22 in July 2026 — no cut, but only three years of record. The 0.27% yield is under 1%, which grades the card warn under §1. The GOOGL card covers the same $0.22 quarterly dividend on the Class A shares.
Key risk: The dividend is incidental to the investment case — at 0.27% it contributes almost nothing to income, and a growth stock’s price can fall a long way.
Changes if: The yield rises above 1% through raises, or the payout ratio rises materially.
- ✓FCF payout (§3) 13.7% of FY2025 free cash flow — inside the 60% pass band.
- ✓Dividend history (§3) Raised every year since initiation in 2024; no cut. Short record (3 years) flagged in the verdict.
- ✓Leverage (§3) Net cash: $55,911m cash at June 30, 2026 against $49,085m long-term debt at December 31, 2025.
- !Yield (§1) 0.27% — under 1%, graded warn as a growth holding.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.