Sunday, January 28, 2018

The One Non-Dividend Stock I Love: Facebook (FB)

My first investment ever was a $2,000 purchase of Facebook back in 2012. I didn't know much about investing, but I knew I wanted to own a piece of Facebook. I had watched it fall down to $18.50 a share and believed it couldn't go much lower. It has been one of the best investment decisions of my life. 
I continued to build up my shares of the stock as it continued to rise. Even as I got into dividend growth investing I wanted to hold a good amount of this company. As a Millennial I know how big social media is to the younger generation. I believe it is here to stay, because Facebook has a very solid moat. 

I've thought about selling my shares now and reinvesting them into dividend growth stocks, but I think the growth opportunity is still very high. I also think that eventually they could pay a dividend and it could end up being very rewarding. 

Why do I love Facebook so much?

For starters they continually beat earnings estimates every time. They had a rough start after their IPO, but after that they haven't disappointed. You can look at their fundamentals and look at their earnings growth and see just how incredible it is. Their user growth may be slowing down, but they have yet to reach markets such as China.

Facebook isn't just the one social media site that is symbolized by their name and logo. Facebook has some very dominant apps in the marketplace:

1. Facebook (over 1 billion+ downloads, 2 billion monthly active users)
2. Whatsapp (over 1 billion+ downloads)
3. Messenger (over 1 billion+ downloads)
4. Instagram (over 500 million+ downloads)
5. Not to mention all the other apps and companies they have acquired (over 60!)

These numbers are astonishing and its hard to imagine something replacing them anytime soon. I've heard all the arguments as to why Facebook isn't a great tool, but this is just short-term noise. They will continue to evolve and fix all the issues that have come up. 

One of the biggest things about Facebook that people don't realize is all the data they have. Think about all the posts, photos, videos, etc. that exist across all of these apps. 

In 2014 there were some 250 billion photos uploaded to Facebook!
In 2017 there were over 90 billion photos uploaded on Instagram!

Every day Facebook grows stronger because of all the data that gets uploaded. I can't imagine what the platform will look like in 10, 20, 30 years from now. It will truly be amazing to see. 

I understand a lot of people don't like Facebook and may not even have a Facebook account. I totally understand why people might dislike it, but you can't argue with their success and the success of their other apps. Everyone I know who doesn't have a Facebook account has an Instagram account. 

Either way this is a company I want to own.

I'll most likely continue to invest small amounts into Facebook from time to time. I use Stockpile to buy partial shares so I don't disrupt the amount I'm putting into dividend growth stocks each month.


Let me know what you guys think! Do you own or would you ever own Facebook?

2 comments:

  1. FB is definitely a machine in the social media space and with their acquisitions they continue to grow their footprint. That being said, while the stock amassed some serious gains the last few years I still focus on dividend paying stocks exclusively. Of course, I don't begrudge anyone from buying solid growing stocks that don't pay dividends for growth. I'm just in a different place regarding my portfolio and what I want it to do for me. Thanks for sharing.

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    1. Hey Keith!
      Thanks for stopping by and providing some feedback!

      Yes, I totally understand and it does go against my philosophy. I bought in at a very low price and just really love the company.

      With that being said it is very possible that I will sell my shares in the future and put them into dividend growth stocks.

      Best of luck!

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