Key Points
-
From a financial standpoint, Meta Platforms should have no problem paying a higher dividend.
-
Although Meta Platforms probably won’t pay a big dividend soon, there is a high-yielding META-focused ETF to consider.
-
Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; get started by clicking here.(Sponsor)
Meta Platforms (NASDAQ:META) is known as a juggernaut in the fields of social media and artificial intelligence (AI). As a dividend payer, however, Meta Platforms is nowhere near juggernaut status.
It’s possible that META stock could be a high-yielding dividend stock someday. Today, we’ll consider whether Meta Platforms has enough capital and sufficient motivation to join the Big Tech dividend elite. If not, then we can take a close look at an exchange traded fund (ETF) offering a way to generate passive income from Meta Platforms stock.
Meta Platforms’ Brief Dividend History
To great fanfare on Wall Street, Meta Platforms announced its first quarterly dividend in February of 2024. It definitely wasn’t a huge dividend, though.
Initiating a dividend program seemed more like a symbolic gesture than a meaningful passive income opportunity. META stock traded at around $450 per share in February 2024, and the quarterly dividend payment was only $0.50 per share. This, disappointingly, translated to an annualized dividend yield of just 0.44%.
Nowadays, Meta Platforms stock trades at around $700 per share and the company’s quarterly dividend is $0.525 per share. On an annualized basis, this equates to a dividend yield of 0.03%. Thus, while the distributions are higher in dollar terms, the yield is actually lower in percentage terms.
This just goes to show that any announced dividend hike should be put into context. Unless Meta Platforms commits to much bigger dividend distribution increases, investors shouldn’t assume that the company is strongly dedicated to big dividend payments.
Can Meta Platforms Afford to Raise Its Dividends?
There’s also the question of whether Meta Platforms is in a good financial position to pay out large dividends. In light of the company’s recently released first-quarter 2025 results, it’s reasonable to conclude that Meta Platforms could easily afford to hike its dividend.
To start off, Meta Platforms’ revenue grew 16% year over year to $42.314 billion in Q1 2025. Even more impressively, the company’s net income increased 35% to $16.644 billion.
Furthermore, as of March 31, 2025, Meta Platforms had $28.75 billion worth of cash and cash equivalents. Also at that time, the company had $280.213 billion in total assets and only $95.184 billion in total liabilities.
So, there’s no denying that Meta Platforms can afford to join the Big Tech dividend elite. The company could, at least in theory, take some of its gigantic cash pile and directly reward Meta Platforms’ shareholders with bigger cash distributions.
Choosing Big Projects Over Dividends
Then, there’s the question of whether Meta Platforms’ executives are eager to pay out big dividends. I hunted far and wide for evidence that Meta Platforms CEO Mark Zuckerberg wants to substantially increase the company’s dividend distributions, but I didn’t find anything concrete.
What I did find was evidence that Meta Platforms likes to invest its capital in big projects rather than big dividends. For instance, Meta Platforms recently disclosed a $14.8 billion investment in a data labeling start-up business called Scale AI.
In another example, Meta Platforms inked a deal with XGS Energy to develop 150 megawatts of geothermal power in New Mexico. These and other developments indicate that Meta Platforms is ambitious, but not in the area of big dividend payments.
Granted, one might argue that Meta Platforms’ investments in next-generation technologies, rather than in dividend payouts, helped META stock rally over the years. That’s a fair point, but it’s not much consolation for avid dividend hunters.
An Intriguing Alternative for Yield Seekers
To be completely honest, it doesn’t look like Meta Platforms will join the Big Tech dividend elite anytime soon. Yet, there’s an interesting ETF that could enable risk-tolerant investors to extract big yield from META stock.
The YieldMax META Option Income Strategy ETF (NYSEARCA:FBY) is a fund that uses U.S. Treasury bonds and a call option writing (selling) strategy to generate income from META stock. Amazingly, FBY boasts a distribution rate (i.e., an annualized dividend-like yield) of 50.12%.
Granted, you’ll need to subtract the fund’s annual operating expenses, which total 1.06% (this is automatically deducted from the share price). Still, the enormous yield offered by the YieldMax META Option Income Strategy ETF should easily cover the fees.
This is a way to indirectly get dividend-like income from Meta Platforms stock. Be aware, though, that holding the YieldMax META Option Income Strategy ETF involves risks.
Because the fund trades derivatives (and specifically options), the YieldMax META Option Income Strategy ETF is susceptible to volatility. Moreover, there’s no guarantee that the fund will actually deliver the expected annual yield.
Nonetheless, since Meta Platforms isn’t likely to offer a hefty dividend yield in 2025, investors might consider the YieldMax META Option Income Strategy ETF. It’s wise, however, to keep all FBY position sizes small since the fund entails risks that must not be overlooked.
Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s simple quiz makes it easier than ever for you to connect with a vetted financial advisor.
Here’s how it works:
-
Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
-
Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
-
Choose Your Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.
Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today! (sponsor)
The post Can Meta Join the Big Tech Dividend Elite? appeared first on 24/7 Wall St..
