Longstanding eComm Stock’s Dividend Thrives Amid Resale Revival

eBay, Inc. (NASDAQ: EBAY) offers the stability of being an eCommerce first mover with the growth engine that comes from being at the forefront of emerging digital marketplace trends, sweetening the deal with a reliable 1.5%+ forward yield. 

First-quarter 2025’s 1% gross merchandise volume growth to $18.8 billion and AI-driven innovations make the current price undervalued considering its slim 14.5x earnings multiple. 

Outshining peers like Etsy (NASDAQ: ETSY), eBay’s niche marketplace and robust cash flow position it as a top dividend stock for digital growth portfolios.

Resale Economy Set to Surge Amid Tighter Macro Conditions

Challenging economic conditions, marked by tariff uncertainty and muted consumer spending, have fueled a surge in the resale economy, amplifying eBay’s growth potential. During periods of macroeconomic strain, i.e., today, consumers gravitate toward secondhand goods to stretch budgets, boosting platforms specializing in non-new, in-season items. 

Industry data from ThredUp’s 2024 Resale Report shows global secondhand market volume grew 18% in 2024, reaching $197 billion, with projections to hit $350 billion by 2028, driven by cost-conscious buyers and sellers seeking supplemental income. In the U.S., 60% of consumers shopped secondhand in 2024, up from 49% in 2020, with 46% citing affordability as a key factor amid inflation and tariff-driven price hikes. 

This resale boom, fueled by economic headwinds, positions eBay to capture a larger slice of a $500 billion addressable market, adding 2-3% to gross merchandise volume (GMV) growth through 2026.

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Strategic Positioning and Competitive Edge

eBay’s unique niche in the $1.7 trillion eComm market centers on non-new goods, with 134 million active buyers and 20 million sellers driving a $500 billion addressable market for resale. 

Likewise, eBay’s $75 billion gross merchandise volume, 90% of which comes from non-new goods, is a top dog in today’s “challenging” macro climate, with focus categories seeing 6% growth in GMV in Q1 2025. Those focus categories, such as collectibles, sneakers, jewelry, and auto parts, cater to 16 million enthusiast buyers who spend $3,100 annually - a strong and growing consumer subsector. 

AI tools enhance seller listings and personalize buyer searches, boosting completion rates by 10% and GMV per seller by 5%. A $200 million investment in authentication and international shipping strengthens trust and cross-border sales. A 6.5% revenue CAGR forecast through 2029, outpacing the 4% retail average, is driven by advertising ($1.6 billion, 13% growth) and focus category expansion, despite competition from Amazon (NASDAQ: AMZN) and Walmart (NYSE: WMT).

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Dividend Profile

A quarterly dividend of $0.27 per share, or $1.08 annually, yields 1.5% at today’s price, with a 25% payout ratio backed by $1.4 billion in annual free cash flow. A seven-year streak of increases, averaging 8% annually, reflects reliability, supported by a 29.8% operating margin. 

Q1’s $1.5 billion in operating cash flow and $5.9 billion cash reserve ensure dividend safety, with advertising growth and cost discipline supporting mid-single-digit raises, making eBay a dependable income anchor.

Bear Case

• Tariff uncertainty could dampen consumer spending, cutting GMV by 3-5%.

• Amazon and Walmart may erode 10% of fixed-price category share. 

• Slower UK and Germany eCommerce growth risks 2% of international GMV. 

• Acquisition integration hiccups, like TCGPlayer, could cost $100 million in synergies.

•  Data breaches or counterfeit goods may erode trust, impacting 5% of sales.

eBay’s Dividend-Powered Resale Revival

A robust Q1 2025, with 1% GMV growth and a 29.8% margin, cements eBay’s position as an eComm player, thriving in a $1.7 trillion market. 

Its focus on collectibles, fashion, and AI-driven personalization, serving 134 million buyers, fuels a 6.5% growth trajectory, outpacing peers. 

A $2 billion ad business and authentication services amplify margins, while a $2 billion buyback and $5.9 billion cash hoard ensure the 1.5% dividend’s durability.