Alphabet (NASDAQ:GOOGL) will report its first-quarter earnings results on Thursday, April 25, after the close. Notably, shares are up 11.9% year-to-date, outperforming the 2.3% move higher in the Nasdaq 100 index. Despite its strong performance, the Google parent still sits below Microsoft, Apple, and NVIDIA in market capitalization at $1.95 trillion. However, the company could have something up its sleeve when it reports results that could further help propel its stock performance - a dividend announcement.

Alphabet's possible dividend move would follow Meta Platforms' (NASDAQ:META) February announcement of its first-ever dividend. At that time, Meta's board of directors initiated a cash dividend of $0.50 per share on its outstanding common stock.

Alphabet has traditionally relied on stock buybacks to return capital to shareholders. It is currently working through a $70 billion stock buyback authorization. As of the end of 2023, the company had $36.3 billion remaining on the plan. While the company is expected to re-up its share repurchase plan, a first-ever dividend announcement could also be forthcoming, given its strong cash flow. According to Bloomberg data, the Google-parent is estimated to have $83 billion in free cash flow in 2024.

"Given the company’s strong BS and material FCF generation, we believe there is a good likelihood for the company to announce a dividend, similar to what Meta (META, Buy) announced last quarter," analysts at Truist commented in a recent note to clients. The analysts expect solid first-quarter results this week and raised their price target on the Buy-rated stock to $170 from $158.

Andrew Zamfotis, portfolio manager at Ami Asset Management Corp., told Bloomberg News that a dividend announcement from the company would be “well received.”

“A dividend would be well received,” said Zamfotis. "While investors are still looking for growth from these companies, today there is also value in cost discipline, and the decision to initiate a dividend suggests that management will be prudent and attempt to allocate capital in a way that balances growth and capital return.”