Alphabet (GOOGL) Intrinsic Value Dividend Stock Analysis

Alphabet (GOOGL) Dividend

Sector: Communication Services 
Industry: Internet Software / Services 

The Alphabet dividend was initiated in 2024.

Current Dividend Annualized: $0.84

Why you might want to own the company:
Alphabet offers a rare combination of steady cash generation, strong growth potential, and innovation leadership. It is a dominant player in digital advertising and search, while also investing aggressively in high-impact future technologies. Its strong balance sheet and strategic diversification position it to weather economic volatility and capitalize on long-term tech trends like AI, automation, and cloud computing.

Alphabet (GOOGL) Stock Intrinsic Value – Margin of Safety Analysis            

(updated June 2024)

Normalized Diluted Earning Per Share (TTM): $8.96
Free Cash Flow Per Share (TTM):  $6.11
Cash Flow From Operations (CFO) Per Share (TTM): $10.81

Estimated Intrinsic Value: $200

Target Buy Price Based on Required Margin of Safety = $167
(Required Margin of Safety Based On Risk Stability
Grade:
A = 0%, B = 20%, C = 40%, D = 60%, F = 80%)

Target SELL Price Based on Estimated Intrinsic Value = $250
(Allow Overvaluation Adjusted by Risk Stability Grade:
 
A = 40%, B = 25%, C = 15%, D = 5%, F = 0%)

Risk / Stability Grade: B

A grade indicates a quality company with a strong balance sheet, high earnings quality, and a positive business environment. These stocks require the slimmest margin of safety within the stock universe.

B grade indicates a company with a good balance sheet, good earning quality, and a stable business environment. The margin of safety required should be greater than stocks with an A grade but less than the average stock.

C grade indicates a company with a sufficient balance sheet, at least average earnings quality, and a reasonably stable business environment. The margin of safety required is greater than A & B stocks, but less than D & F stocks.

D grade indicates a company in good standing but has issues that could affect its stability and long term risks. D rated stocks should require a large margin of safety when purchased.

F grade indicates a company with significant issues that are currently affecting its stability and long term risks. Require an extremely large margin of safety for F rated stocks when purchased.

Financial Risk Grade: A+

A grade indicates an extremely low probability of a dividend cut. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories.

B grade indicates a very low probability for a dividend cut.

C grade indicates a low probability for a dividend cut and/or average safety risk.

D grade indicates there are issues that should be considered concerning future dividend payments.

F grade indicates serious dividend safety risks. Investors should complete comprehensive due diligence before investing.

Earnings Quality Grade: A

A grade indicates earnings quality is high or far above average.

B grade indicates earnings quality is good and/or above average.

C grade indicates earnings quality is acceptable or average.

D grade indicates earnings quality is poor and requires thoughtful due diligence.

F grade indicates the quality of the earnings is poor or far below average requiring serious due diligence.

Earnings Report:  3/31/25

What the company does:
Alphabet Inc. is the parent company of Google and a global technology leader focused on internet-based services and products. Its core business includes search, digital advertising, YouTube, Android, and the Chrome browser. Alphabet also operates in cloud computing (Google Cloud), consumer hardware (Pixel, Nest), and moonshot projects under its “Other Bets” segment, such as Waymo (autonomous vehicles) and Verily (life sciences).

Company strengths:
Alphabet’s biggest strength lies in its dominant position in online search and digital advertising, generating massive cash flows through Google Ads and YouTube. Its ecosystem benefits from network effects, data scale, and brand loyalty. With deep resources and talent, Alphabet consistently invests in innovation, expanding its capabilities in artificial intelligence, cloud computing, and emerging technologies like autonomous driving and quantum computing.

Company challenges:
Alphabet faces growing regulatory pressure around the world over privacy, antitrust, and content moderation, which could constrain business practices and result in fines or enforced structural changes. Competition in cloud computing and AI is fierce, with rivals like Microsoft and Amazon posing major threats. Additionally, reliance on advertising for the majority of revenue exposes the company to cyclical economic downturns.

Disclaimer:
While Arbor Investment Planner has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.