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Alphabet Inc. (GOOG)
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Sun Life Financial Inc. (SLF)
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Hammond Power Solutions Inc. Class A Subordinate Voting Shares (HPS.A)
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Brookfield Corporation Class A Limited Voting Shares (BN)
Q: Why is their Share based compensation (SBC) so impactful and visible in the results? Is it because of the size of the company and revenue? Other companies I am sure has SBC but I rarely see it as a top headline item in earning press release.
5i Research Answer:
The SBC is fairly high, but we have outlined its SBC as a percentage of last-twelve months profits against other well-known Canadian and US names:
- HPS.A: 22% SBC of LTM profits
- BN: 10% SBC of LTM profits
- SLF: 25% SBC of LTM profits
- GOOG: 24% SBC of LTM profits
While its level of SBC per dollar of profits is within a fairly normal range for a handful of randomly selected stocks, its volatility of SBC is higher. We believe this is due to its smaller company size and higher stock price volatility/growth.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in GOOG.