Tech Giant Boosts Quarterly Dividends 7.7%
By: Ned Piplovic,
A tech giant, offering shareholders a current yield of 2.2%, just boosted its quarterly dividends 7.7% to mark its 12th consecutive year of hiking 0dividends.
In addition to the rising dividends, Microsoft Corporation (NASDAQ:MSFT) rewarded its shareholders with a 31.4% share price gain over the past 12 months. Its total return, combining share-price growth and the total dividend distribution over the last year, hit 34.9%.
The company’s next ex-dividend date is scheduled for November 16, 2017, and its pay date follows about a month later, on December 14, 2017.
Microsoft Corporation (NASDAQ:MSFT)
Founded in 1975 and headquartered in Redmond, Washington, the Microsoft Corporation develops, licenses, and supports software products, services and devices worldwide. The company’s Productivity and Business Processes segment offers Office 365 commercial products and services for businesses, including Office, Exchange, SharePoint, Skype for Business, and related Client Access Licenses (CALs). Additionally, this segment provides consumer productivity Office suite of applications, as well as the Office 365 consumer services, such as Skype, Outlook.com and OneDrive. The Dynamics segment provides business applications for financial management, enterprise resource planning, customer relationship management, supply chain management and the LinkedIn online professional network.
The Intelligent Cloud segment licenses server products and cloud services, such as Microsoft SQL Server, Windows Server, Visual Studio, System Center, as well as Azure, a cloud platform with computing, networking, storage, database and management services. Additionally, this segment provides the Premier Support and Microsoft Consulting enterprise services, which assist in developing, deploying, and managing Microsoft server and desktop solutions. Training and certification to developers and IT professionals on Microsoft products area also part of the Intelligent Cloud segment. Microsoft’s More Personal Computing segment comprises licensing of the Windows operating system to Original Equipment Manufacturers (OEM), patent licensing, Windows Internet of Things, MSN display advertising and Windows Phone licensing. Additionally, this segment designs and manufactures electronic devices that include the Microsoft Surface tablet devices, phones and PC accessories, as well as search and advertising through the company’s Bing and Bing Ads platforms. This segment also provides gaming platforms, including Xbox hardware, Xbox Live and video games.
The company’s share traded sideways for almost a decade between December 1999 and January 2009, before embarking on its current, steadily increasing uptrend. Furthermore, the share price keeps accelerating the rate at which it is increasing. The most recent 12-month period saw a 31.4% share price enhancement with almost no volatility. The share price’s 52-week low of $56.92 occurred on October 13, 2016, and the most recent close of $76.29 on October 10, 2017, marked a new 52-week high.
The recent high asset appreciation is just the icing on the cake, as the company has rewarded its shareholders with a dozen years of consecutive boosts to its annual dividend payout. Since 2005, MSFT hiked its annual dividend amount at an average growth rate of 14.8% per year. The result of that significant growth rate is a 425% total dividend increase over the past 12 years.
Additionally, the company’s current yield is considerably higher than the average yields of its peers. Microsoft’s 2.2% yield is 64.3% above the 1.34% simple average yield for the companies in the Technology sector and almost 220% higher compared to the company’s peers in the Application Software Industry segment.
The rising dividend income and growing capital gains combination resulted in sizable total returns over the last few years. In addition to the 34.9% total return over the last 12 months, the total returns over the three and five years were 84% and 186%. respectively.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.