Amazon to reap dividend from spending spree

Amazon.com’s days as the most expensive stock in the Standard & Poor’s 500 Index are numbered as chief executive Jeff Bezos reaps profit from an $18.5bn (€14.4bn) spending spree designed to spur growth.

Amazon, whose stock has almost doubled in three years, trades at more than 700 times earnings, the highest ratio of any company in the S&P 500 — a ranking it has held for nine months. As investments in digital content and cloud computing begin to pay off, that multiple is predicted to fall to 48 next year, making Amazon the 10th-most costly in the benchmark index, according to data compiled by Bloomberg.

Investors are betting on higher earnings as Amazon sells more movies, music and books for the Kindle Fire tablet and gets outside businesses to sell items from its storefront. Operating margin is projected to widen in 2013 after contracting for two years as it funnelled money into warehouses and improved its ability to deliver computing services over the Internet.