<div id="readability-page-1"><p><strong>Alphabet</strong> <span>(GOOGL<span> -0.15%</span>)</span> <span>(GOOG<span> -0.12%</span>)</span> has turned a corner from a pure growth story to a growth-and-income story. The parent of Google, YouTube, and Google Cloud is now paying a quarterly dividend and, more importantly, has ample capacity to raise it over time. Yes, shares have been volatile around heavy artificial intelligence (AI) investment and data-center build-outs, but the operating performance underneath remains strong -- and a steady dividend payment is the icing on the cake for investors looking for a dependable investment.</p> <p>The case for Alphabet as a dividend stock starts with fundamentals: durable revenue growth, expanding profitability in the right places, and a fortress balance sheet. Add in the company's capital-allocation framework, and the ingredients for a reliable, rising payout are in place.</p> <div><p><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MzI1NjcvZ29vZ2wtc3RvY2stZ29vZy1hbHBoYWJldC5qcGcmdz03MDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="459" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MzI1NjcvZ29vZ2wtc3RvY2stZ29vZy1hbHBoYWJldC5qcGcmdz03MDA"/></p><p>Image source: Getty Images.</p> </div> <h2>1. A growing dividend backed by real cash flow</h2> <p>Alphabet's dividend isn't about yield today. It's about safety and room to grow. The company increased its quarterly dividend by 5% to $0.21 per share in April 2025, one year after initiating a $0.20 payout. That raise came on the heels of another strong quarter and reflected confidence in long-term cash generation.</p> <p>Strong business momentum has continued into Q2. In the second quarter of 2025, revenue rose 14% to $96.4 billion, and earnings per share increased 22% to $2.31. Critically for the sake of assessing the dividend, trailing-12-month free cash flow stood at about $66.7 billion as of the June-ending quarter -- plenty to cover dividends while continuing to invest. Management also highlighted continued momentum across Search, YouTube, subscriptions, and Cloud, with CEO Sundar Pichai calling the quarter &#34;standout&#34; and noting an increased 2025 capital-expenditure plan to roughly $85 billion to support AI and Cloud demand. These dynamics point to a payout with room to rise even as investment remains elevated.</p> <h2>2. Returning cash to shareholders in more ways than one</h2> <p>Alphabet pairs its dividend with meaningful repurchases. So, in effect, its dividend understates the company's capital return program by a long shot.</p> <p>In April 2025, the board authorized an additional $70 billion in buybacks. Showing how aggressively the company is executing on its capital return program, the company returned $15.8 billion to shareholders in Q2 alone -- roughly $13.3 billion via repurchases and about $2.5 billion in dividends -- and finished the period with $95.1 billion in cash, cash equivalents, and short-term marketable securities. That balance sheet strength gives management flexibility to keep reducing the share count and fund a growing dividend payout.</p>  <h2>3. Multiple growth engines to fund future raises</h2> <p>The best dividend stocks have dependable growth that can translate into higher future payouts. Alphabet checks that box. In Q2, Google Services revenue increased 12% to $82.5 billion, led by double-digit gains in Search and YouTube. Google Cloud revenue increased 32% to $13.6 billion, and Cloud operating income climbed to $2.8 billion from $1.2 billion a year ago -- an expansion that pushed Cloud's operating margin to roughly 21% from about 11%. As Alphabet's cloud computing business scales, it complements the already-robust services business, broadening the company's capacity to grow cash returns over time.</p> <p>But it's worth noting that Alphabet's cash flows, while still significant, are under pressure. And this could eventually translate to slower growth on the income statement as well; heavy AI-infrastructure capital expenditures lift depreciation and can pressure margins as the depreciated investments pile up. And another key risk for Alphabet is its ad business's dependence on the economy. Furthermore, given Alphabet's size and scale, regulatory scrutiny is a constant.</p> <p>Despite these risks, Alphabet's mix of large, profitable businesses and a rapidly improving Cloud segment provides multiple levers to grow earnings and cash flow. The dividend math is straightforward: a modest payout today, a low payout ratio, and a path for steady increases as profits compound.</p> <p>Add it up, and Alphabet's dividend case is straightforward. A conservative payout is covered by strong free cash flow, repurchases steadily reduce the share count, and multiple profit engines -- Search and YouTube today, a more profitable Cloud over time -- expand the tech company's capacity for future dividend hikes. Yes, the current buildout in AI infrastructure will keep spending elevated, but cash generation supports both investment and rising cash returns. For investors seeking income growth grounded in fundamentals, Alphabet belongs near the top of the list.</p>                                                                            </div>

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<p>Alphabet (GOOGL) has transitioned to a growth-and-income model, now offering a quarterly dividend with potential for future increases. The company reported a 14% revenue rise to $96.4 billion in Q2 2025, with strong free cash flow of $66.7 billion. Alphabet also authorized $70 billion in buybacks, returning $15.8 billion to shareholders in Q2. With robust growth in Google Services and Cloud, Alphabet is well-positioned for future dividend hikes despite some risks in cash flow and regulatory scrutiny. Overall, it presents a compelling case for dividend-seeking investors.</p>

- Alphabet has transitioned from a pure growth company to one that also focuses on income, now offering a quarterly dividend with potential for future increases.  
- In Q2 2025, Alphabet reported a 14% revenue increase to $96.4 billion and a 22% rise in earnings per share, supported by strong free cash flow of $66.7 billion.  
- The company combines dividends with significant share repurchases, maintaining a robust balance sheet that allows for continued investment and cash returns, despite potential risks from economic dependence and regulatory scrutiny.

3 Reasons Alphabet Is One of the Best Dividend Stocks to Own