Shareholders in Meta are about to start receiving a dividend for the first time. Most of them probably won’t notice. Investors will receive a piddling 50 cents per share each quarter, starting next month. Given the prevailing share price of the social media monster, this equates to an annual dividend yield of just 0.42 per cent. This sounds tiny. It is tiny. But this particular form of microdosing sent out a big signal, for the company and potentially for the wider market.Meta encapsulates the grinding decline in dividend culture in US equity markets over the past two decades. Few of its shareholders will have missed these disbursements over the past 10 years, during which its publicly traded stocks have delivered gains of almost 700 per cent. Instead, share buybacks have provided the primary way to return capital to shareholders — Meta bought back more than $90bn worth of stock from 2021 to 2023 and intends to buy much more, at a pace that far exceeds the scale of the new dividend payouts. 

But the message matters. Analysts welcomed the move as a “coming of age” and a signal that Mark Zuckerberg’s empire would tilt in favour of staid, sensible rewards for shareholders over ventures in the metaverse. 

A century ago, companies paid a dividend even at the point of listing on the stock market, as Daniel Peris, a specialist dividend-focused investor at Federated Hermes, explains in his new book The Ownership Dividend. It was considered an integral part of the investment process, and for decades afterwards, the biggest signal came from a failure to pay out — often seen as an outright sign of financial distress.