Does Microsoft Pay Dividends in 2024? MSFT Dividend History

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Does Microsoft Pay Dividends?

Yes, Microsoft (MSFT) pays dividends. Microsoft stock dividend is paid quarterly, in March, June, September, and December every year. The latest Microsoft dividend per share of $0.75 for the first quarter of 2024 was declared on March 12, with the due payment on June 13 this year.

Microsoft’s dividends have steadily increased each financial year in the last few years, a positive sign for long-term investors and those who want to rely on the stock for a regular passive income.

As such, as of now, the company is unlikely to stop paying dividends, having already attracted a steady, loyal, and constantly growing investor base.

Microsoft is one of the biggest tech companies in the world, part of the Magnificent Seven stocks, which also includes Amazon (AMZN), Nvidia (NVDA), Tesla (TSLA), Alphabet (GOOGL), Apple (AAPL), and Meta Platforms (META).

As of April 16, Microsoft has a market capitalization of $3.073 trillion, which makes it the largest company in the world and one of the investors’ tech favorites.

Microsoft (MSFT) Market Cap History from 2001 to 2024

Will Microsoft’s (MSFT) dividend increase further? Learn in this article.

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Key Takeaways

  • Microsoft is the biggest tech company in the world, according to its $3.073 trillion market capitalization as of April 2024.
  • Microsoft stock dividend payments started in 2003 and have seen consistent growth since then.
  • The last Microsoft dividend of $0.75 per share was paid on March 13, 2024, with the next one coming up on June 13 this year, also of $0.75 per share.
  • Microsoft’s dividend growth has been largely supported by its expansion and investment in artificial intelligence and other cutting-edge products.
  • Investors typically rely on dividends as rewards for holding a company’s stock for several years, as well as for supplemental and steady long-term income.

How Often Does Microsoft Pay a Dividend?

When does Microsoft pay dividends? This continues to remain a key question for investors.

Currently, the company pays dividends four times a year, once every quarter, in March, June, September, and December.

The last Microsoft dividend payment date was on March 13, 2024, of $0.75 per share paid in cash. This was announced on November 28, 2023, with the Ex/EFF date on February 14, 2024.

The Ex/EFF date, also known as the ex-dividend date, indicates the date on and following which any new investor is not eligible for that quarter’s dividend. Usually, the ex-dividend date falls one trading or business day before the record date.

The next Microsoft dividend date will be on June 13, 2024, which will also be a cash amount of $0.75 per share, with the ex/EFF date on May 15, 2024, and the dividend announced on March 12, 2024.

Why Is Microsoft’s Dividend So High?

Microsoft’s dividend is higher than other US-based tech stocks, especially Magnificent Seven stocks. Microsoft and other large US-based companies such as Apple, Exxon Mobil, and JP Morgan are some of the companies with the highest dividend expenses.

Microsoft has increased its dividend every financial year since it was issued, with the dividend amount having almost doubled in the last six years. This is mainly due to the company consistently earning high revenues and having multiple income streams.

Amongst these, AI takes the cake, with the company exploring many separate avenues to generate a sizeable income from AI. These include key products such as Microsoft’s AI assistant, Microsoft Copilot, and the company’s cloud computing platform, Microsoft Azure.

Microsoft Revenue Growth History

Microsoft is seen as a lower-risk but possibly high-reward company due to its robust balance sheet and consistently high cash flow.

As such, the company can afford to invest in several new ventures simultaneously while always having a safety net in case some of these initiatives don’t work out.

It can also acquire new companies and take a few more risks due to its deep capital base and diversified business. The company also makes sure to consistently invest in research and development, to stay abreast of the market and new developments.

All of the above contributes significantly to Microsoft’s ability to consistently raise dividends while still making sure that it is not using up too much of its earnings.

Microsoft (MSFT) Dividend History

Microsoft started paying a dividend back in 2003, with a cash payment of $0.08. This was soon after the company launched best-selling products such as the Xbox and the Windows XP, and was in a good position to commit to dividend payments for the long term.

Since then, the company has been consistently paying dividends every quarter, with the amount also growing at a steady pace.

This has been despite the ups and downs seen by the company, both in the early 2000s, such as the European Union Windows OS antitrust case in 2005, as well as more recent controversies, including cybersecurity concerns and layoffs.

As such, this robust MSFT dividend history has gone a long way in ensuring that the company has a continuously growing base of loyal, long-term investors.

Microsoft (MSFT) Dividend History

An MSFT dividend yield refers to the amount a company pays in dividends per year compared to its current stock price.

Currently, Microsoft’s annual dividend yield is 0.71%, as of April 16, 2024

Although that may be considered lower than average, it is still the highest amongst the Magnificent Seven stocks.

Microsoft’s dividend yield is slightly underwhelming due to the company’s earnings having grown at an outsized pace over the years, thus reducing the dividend yield.

In the last 10 years, Microsoft’s stock has gained more than 900%. Thus, although the company has almost tripled its dividends during this time, the dividend yield is still relatively low compared to other companies that may not have seen such impressive share price growth.

Dividend yields are usually used by investors to gauge the amount of returns they can expect to obtain from a certain stock or investment compared to the price they pay for them.

However, Microsoft is a perfect example of why investors should not judge a stock only by its dividend yield but also dive deeper into the fundamentals before deciding whether it’s the right fit for them.

Microsoft’s Dividend Payout

A dividend payout ratio highlights how much of a company’s earnings it pays out as dividends.

As of December 2023, Microsoft’s dividend payout ratio (DPR) was 0.26, according to GuruFocus.

This is considerably less than that of other dividend-paying competitors, such as IBM, which had a dividend payout ratio of 0.43 as of December 2023, and Oracle, whose DPR was 0.41 for the same period.

This basically means that Microsoft pays 26% of its earnings to shareholders as dividends, whereas other similar companies pay out a much higher percentage, such as IBM at 43% and Oracle at 41%.

As such, a higher dividend payout ratio usually means that a company is using relatively more of its profits to pay dividends to its shareholders, thus leaving less to be reinvested back into the business.

On the other hand, a lower dividend payout ratio means that the company is using most of its profits to reinvest into the business and, as such, may not be paying very high or very frequent dividends as of yet.

A company’s dividend payout ratio helps investors analyze the companies they want to invest in.

For example, investors who rely on a company for steady long-term dividend income can invest in companies with a higher DPR.

On the other hand, investors who are willing to forgo short-term income for longer-term capital gains and share price appreciation due to the business focusing more on growth and expansion can consider investing in stocks with a lower DPR.

Microsoft’s Dividend Growth

Microsoft started paying dividends in 2003, beginning with $0.08 per share. By 2013, this figure had touched $0.23 per share, before climbing to $0.28 in 2014, $0.31 in 2015, $0.36 in 2016 and $0.42 in 2018. By 2020, Microsoft dividends had touched $0.51, with the latest dividend, announced for June 2024, expected to be $0.75.

Microsoft has almost doubled its dividends in the last six years, nearly tripling them in the last decade. On the other hand, other Magnificent Stocks, such as Apple, have hardly increased dividends by 1% per share for the last several years.

However, that does not mean stocks that follow Apple’s strategy are inherently less profitable.

This is because such companies often choose other ways to reward shareholders, such as through stock buybacks. Furthermore, they might also see considerable share price appreciation.

Will Microsoft Ever Increase Its Dividend?

According to Microsoft’s dividend history, it is very likely that the company will increase its dividend again.

The company has steadily increased its dividend payments every financial year since 2003.

For the fiscal year 2024, the company pulled up its dividend by approximately 10%, from $0.68 to $0.75 per share, applicable from the first quarterly payment of the fiscal year 2024.

Given how Microsoft’s stock price has also increased, it is very likely that the company will continue to have the resources and necessary earnings to keep rewarding its investors with higher dividends.

Microsoft (MSFT) Stock 5-Year Performance.
Microsoft (MSFT) Stock 5-Year Performance. Source: TradingView

Four Tech Stocks That Pay Better Dividends Than Microsoft

Although Microsoft pays a relatively generous dividend, other tech companies pay a higher amount, which makes them potentially suitable for investors looking to diversify their portfolios with other high dividend-paying stocks.

BroadcomIBMQualcommTexas Instruments

Broadcom is a US-based semiconductor manufacturer, designer, and worldwide supplier. Its products are used across the networking, wireless, broadband, data center, and software and storage industries. Founded in 1961, it is headquartered in Palo Alto, California, and has a market capitalization of $624.8 billion.

Broadcom last paid a cash dividend of $5.25 on March 29, 2024. The company pays quarterly dividends in March, June, September, and December.

IBM is another US tech giant that was also crowned as the biggest research organization globally. It was founded in 1911, currently headquartered in Armonk. New York. The company’s services include automation, artificial intelligence, robotics, cloud computing, blockchain, consulting, software, and others. Arvind Krishna is the current chairman and CEO.

The company last paid a cash dividend of $1.66 on March 9, 2024. IBM also has a quarterly dividend schedule, with payments in March, June, September, and December.

Qualcomm is a semiconductor, wireless technology services, and software company headquartered in San Diego, California. Founded in 1985 by Irwin Jacobs, Andrew Viterbi, and Franklin P. Antonio, the company’s current CEO is Cristiano Amon. Some of its key products include Snapdragon, qChat, Gobi, and BREW.

Qualcomm pays dividends four times a year in March, June, September, and December. Its latest dividend payment was $0.80 on March 21, 2024.

Texas Instruments is an integrated circuits and semiconductor company that mainly produces embedded processors and analog chips. Founded in 1930, it is headquartered in Dallas, Texas. The company’s current CEO is Haviv Ilan. Some of Texas’s other key products include calculators, digital light processors, and digital signal processors.

The company pays dividends in February, May, August, and November, with the latest dividend payment of $1.30 on February 13, 2024.

What Are Dividends?

Dividends are per-share basis compensations that a company gives out to its investors or shareholders from its excess income and profits. These can be monthly, quarterly, semi-annual, or annual, although the last one is the more common option.

Usually, companies decide their dividend schedules and amounts depending on their goals and year-to-year performances.

There are several kinds of dividends, namely cash, property, stock, liquidating, and scrip dividends.

The dividend amount does not usually stay static and can change from year to year, with investors receiving bumper or record dividends in particularly good years but none in disappointing years.

The total amount of dividend each investor gets depends on the number of shares they have.

Why Are Dividends Important to Investors?

Dividends can hold special significance for investors due to a variety of reasons. In some cases, they work as rewards for long-term investors. These investors keep a company’s shares for several years, riding out market movements and paying little mind to public sentiment regarding the company and its short-term performance.

In these cases, dividends reward the loyalty and unwavering faith some investors have in a company. Long-term investors can often see their dividends growing quite a bit, while share prices can also appreciate simultaneously if a company has good fundamentals.

In other cases, investors may also depend upon dividend stocks for supplementary income, emergency cash, retirement income, or bonus investment income, especially if it’s a steady source. Dividends also have several tax benefits, which can lower investors’ overall tax bills.

However, investors must decide on the exact strategy to invest in dividend-paying stocks following thorough individual research and due diligence and assessing their risk-taking capacity.

The Bottom Line

Microsoft is one of the biggest tech companies in the world and part of the Magnificent Seven tech stocks. Microsoft’s key products include the Windows operating system, Microsoft Copilot, and Microsoft Azure.

The company started paying a dividend in 2003 at $0.08 and has consistently raised dividends since then, clocking in at $0.75 in March 2024.

Microsoft’s strong capital base and balance sheet, as well as its diversified business portfolio and emphasis on multiple income streams, have contributed to the consistently increasing earnings. This has allowed the company to raise dividends accordingly year-over-year.

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Indrabati Lahiri
Financial Writer & Editor
Indrabati Lahiri
Financial Writer & Editor

Indrabati has over four years of experience as a financial reporter and editor, covering business, commodities, and macroeconomics. While contributing to Techopedia, she’s currently working as a Business Reporter at Euronews. Her articles can be found in other online publications, including Capital.com and IBM, among others. Indrabati holds an MSc in Investment Banking and an MA in English.