Alphabet Stock, Share Price And Investing Info | Focus on US Stock Market Today
What is Alphabet?
Alphabet is a U.S-based company popularly known as the parent company of Google, but it also has numerous other businesses under its umbrella. Many of those businesses previously existed as Google subsidiaries. (Source: Alphabet)
Alphabet’s history and operations
The company was created in 2015 even though main subsidiaries such as Google have been around for far longer than that. It was made as part of a plan to streamline its operations, especially with the expanded scope of business, allowing for easier management. Subdividing the different businesses and having them operated as individual companies paves way for better governance and more success. Here is a list of some of Alphabet’s other subsidiaries.
- Waymo- a company that develops autonomous vehicle technology and operates self-driving taxis.
- Wing- A company that makes delivery drones and support navigation systems.
- X-an innovation hub that focuses on breakthrough technologies that have the potential to change people’s lives.
- Calico- a research and development company that operates in the biotech segment.
- DeepMind- A London-based company that deals with AI research.
- YouTube TV- Alphabet’s TV service that provides cloud-based DVR and on-demand content.
- Google Nest- A subsidiary of Alphabet that makes smart home devices.
- Google Fiber- A company that provides broadband internet connectivity in the U.S.
Alphabet announced major changes to its management in 2019. Sergey Brin and Larry Page stepped down their respective positions as CEO and president. A press release at the time revealed that they would continue to be part of the company as board members and co-founders. However, they did hand off the company’s management to capable individuals who have managed to maintain the company’s strong growth trajectory in the last few months, especially in 2020, during the challenging economic times. Here is a list of Alphabet’s current executives. (Source: Craft)
- Sundar Pichai- CEO of Alphabet and Google.
- Ruth Porat- Senior VP and Chief Financial Officer
- John L. Hennessy- Board chairman
- L John Doerr- Board member.
- Robin L. Washington- Board member
- Roger W. Ferguson- Board member
- Frances Arnold- board member
- K. Ram Shriram- board member
- Alan R. Mulally- board member.
- Ann Mather.
Alphabet share price and performance
Alphabet stock is publicly listed on the NASDAQ exchange under the ticker GOOG’. Alphabet share price closed the latest trading session at $2,095.17 after gaining 1.17% during the session. The company’s market capitalization is currently at $1.408 trillion, with an average trading volume of 1,542,818 shares. Its current 52-week low is $1,013.54, while the 52-week high is $2,152.68. The stock is currently trading near the upper price range based on its latest closing price, giving a nod to the favorable earnings as per its latest earnings call.
Alphabet’s share price performance in February 2021 has overall been bullish. The stock traded as low as $1,830 during the month and also happens to be the same month that it reached its current 52-week high. Its performance in the last 12-months indicates that the share price was significantly affected by the global pandemic news in March 2020. However, the stock quickly bounced back and has been bullish ever since, even managing to reach new historic highs.
Alphabet attributes its strong performance in 2020 to continued growth in its advertising business. In its latest earnings call, the company reported that direct-response ads on YouTube grew by 47% in 2020. The cloud services business generated$46.43 billion in revenue and $1.24 billion in profit in 4Q2020, although the company reported $5.61 billion unit loss for the full year on account of the pandemic’s negative impact. (Source: CNBC).
Alphabet dividend policy
The company has certainly enjoyed a lot of growth since its incorporation in 2015, but it is yet to pay out dividends to shareholders. The lack of a dividend policy has earned a lot of criticism considering the company’s highly profitable nature. However, there are expectations that it will soon announce a dividend policy, although that remains to be seen. (Source: FT).
Alphabet allows investors to freely purchase or sell dividends if they wish to do so despite its lack of a dividend policy. Companies have traditionally used dividends as a tool to show that they have consistent cash flow from their businesses. This strategy gives a rough idea of the company’s performance at any given time, but it looks like Alphabet is not worried about that. However, companies take this approach to attract investors.
Alphabet is cash-rich, and it has been using the cash to invest heavily in areas that can generate a lot of growth in the future. It would pay a healthy dividend if it had a dividend policy based on its performance in the last 5 years.
What to expect from Alphabet moving forward
The decision to create a new parent company called Alphabet under which Google and other companies would be operated was a smart move. Google had become so big that it was starting to operate beyond its scope. The move also paved way for easier management and easier pursuit of other projects and investments.
Alphabet is a conglomerate with many facets. For example, its subsidiary Google is one of the leading companies in the global advertising industry, which is expected to continue performing well into the future. However, Alphabet’s other companies also allow it to explore other areas, and some might still support the core advertising business. For example, Google Fiber seeks to expand internet to more people across the U.S, a move that will allow more people to access faster internet through which they can access other services such as YouTube TV.
Alphabet is also a pioneer in technologies of the future. For example, analysts expect autonomous driving to be the future of mobility, an idea that Alphabet is exploring. AI is also another area that many technology companies are betting on to drive growth in the future. Alphabet subsidiaries paint a strong picture of diversity into key areas. In other words, the company has been positioning itself strategically to tap into growth opportunities in different industries or segments. This explains why Alphabet has delivered such strong growth.