Salesforce (NYSE:CRM) is the latest big tech stock to begin offering a dividend, following in the footsteps of social media giant Meta Platforms (NASDAQ:META). Salesforce announced its dividend alongside with its earnings announcement last week.
The quarterly dividend will be 40 cents per share. For a stock that closed at nearly $317 last week, that translates into an annual yield of just 0.5%. Investors who buy the stock shouldn't expect riches - - it would require a $200,000 investment at that rate for you to collect $1,000 in dividends over the course of a full year.
In addition to the dividend, Salesforce also announced that it would be boosting its share repurchase program by $10 billion, in what could give investors even more reasons to buy and hold shares of the tech company.
Salesforce is coming off a strong fourth quarter with revenue for the period ending Jan. 31 coming in at $9.3 billion and rising by 11% year over year. That came in better than analyst expectations of $9.2 billion. The company's adjusted EPS of $2.29 was also better than Wall Street expectations of $2.27.
Trading at more than 32 times forward earnings, Salesforce isn't a cheap stock to own given its modest growth rate. For dividend investors, there are better options out there to consider than the tech stock. While the start of dividend payments and an increase in share buybacks are positive signs for Salesforce, they aren't enough of a reason to buy the stock given its inflated valuation.
