Saturday, June 16, 2012

eBay Inc - EBAY: A Future Dividend Payer?

eBay Inc., stock ticker EBAY, is in a great position to begin paying a quarterly dividend. E-commerce has not stopped growing and should continue to be profitable as long as the Internet is around (which will be forever!). The future of e-commerce looks very bright. eBay owns PayPal, which is beginning to take market share from Visa (stock ticker V) and MasterCard (stock ticker MA).

I like eBay's long term outlook, but in the meantime they should seriously consider paying a 1.5 to 2% dividend. Feel free to click here to visit eBay's Financial Information and see for yourself how eBay makes and keeps their money.

eBay was founded in 1995 and is the worldwide leader in shopping and payments on the web. Every day, they connect hundreds of millions of buyers and sellers — and they continue to find new ways to help people do business around the world as we create long-term value for their shareholders.

Here is a great interview with CEO of eBay Inc., John Donahue.


eBay enables commerce through three reportable segments: Marketplaces, Payments and GSI Commerce (GSI). These segments provide online platform, services and tools to help individuals and small, medium and large merchants globally to establish online and mobile commerce and payments. In addition, through X.commerce, it has created an open source platform, which provides software developers and merchants access to its applications programming interfaces (APIs), to develop software and solutions for commerce. As of December 31, 2011, it had more than 100 million active users transacting on its sites, millions of merchants using one or more of its platforms, and a developer community with more than 800,000 members using its APIs. During the year ended December 31, 2011, the Company acquired Brands4friends and GittiGidiyor. In May 2012, PRIMEDIA announced that it completed the acquisition of eBay's Rent.com subsidiary.

Listed below are eBay's key statistics:

52 week share price 26.86 - 41.96, Vol / Avg. 14.61M/13.07, MMkt cap 52.51, BP/E 16.01, Div/yield $0.00 (For now!)/0.00%, EPS 2.54, Shares 1.29B, Beta 1.48, Inst. own 83%

Here are some great articles about companies who should pay a dividend, but don't! eBay is included within each list. I am not the eBay bandwagon here. I strongly believe in the long-term upside of EBAY and have always believed that they can pay at least a 1.5% to 2% dividend yield.

10 Stocks That Should Pay A Dividend, But Don't

More Than 20 Great Companies Which Refuse To Pay Dividends

7 Big Tech Companies That Need To Follow Apple’s Dividend Policy

What a 2% Dividend Yield Would Look Like at Five Big Techs

So what would eBay's financials look like if they started to pay a 2% dividend? One article suggests:


Annual dividend per share: 47 centsTotal annual payout: $616 millionCash and short-term investments: $4.9 billionPayout as percentage of cash: 13%

It is possible! Need more proof? Please read eBay's most recent Form 10-Q, here.


Investors demand more of their return from cash dividends and now is time for eBay to please their patience shareholders. What are your thoughts? Will an eBay dividend solidify the company as a long-term investment? Will eBay be around for 10, 15, 25 years from now? Have you used eBay during the last quarter? Feel free to comment below to start the conversation. Until next time, please watch these two cool eBay related YouTube videos below and have a great day!




eBay is currently undervalued. Their future looks bright as they begin is partnering with retailers (i.e. GiftsNearby). PayPal gives the company a unique advantage over its competitors.


eBay Christmas Commercial


CEO John Donahue discusses why is social media important?

How To Sell Your First Item on eBay

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