Amazon Is Unlikely To Reward Investors With Dividends Or Buybacks, And That Is Good


  • Amazon and Tesla are the only remaining companies in the Magnificent Seven group that do not give dividends or buybacks.
  • Amazon is unlikely to start rewarding investors unlike other tech companies, as it can still use the cash flow in many new growth opportunities.
  • Amazon is investing heavily in building better logistics, which will give the company a long-term edge in e-commerce and also increase the attraction of its subscription business.
  • Amazon is also investing in many other segments, including streaming, cloud, autonomous cars, and international expansion, which should give the stock a better growth trajectory compared to investment in dividends and buybacks.
  • In the end, it is unlikely that Jeff Bezos is interested in short-term capital return programs, and he would rather see investment in long-term projects.

Amazon prime boxes and envelopes delivered to a front door of residential building

Daria Nipot

Many tech companies have in recent quarters announced major capital returns programs. Some of these announcements have helped the stock sentiment. Investors were hoping that Amazon’s (NASDAQ:AMZN) (NEOE:AMZN:CA) management would also announce some

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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