Microsoft: A Solid Dividend Stock With Upside (MSFT)

Microsoft (MSFT) hiked its quarterly dividend up to 36 cents this week — a 16.1% increase versus its most recent quarterly dividend. Microsoft’s new 36-cent payout gives MSFT stock a dividend yield of 3.26%, putting it in the upper echelon of big, high-yield tech stocks. Clearly, this dividend raise is good news for Microsoft investors, but perhaps even better is that MSFT stock still has a lot of room for even higher dividends in the years to come.

Over the past five years, Microsoft has increased its quarterly dividend payout from 16 cents to 36 — a 125% increase. If we back up even further to 10 years, Microsoft has upped its quarterly dividend by 350%. Based on Microsoft’s 8 billion shares outstanding, the company will be paying out roughly $11.5 billion over the next year in dividend payments. Microsoft also has a cloud business that’s growing at a triple-digit rate and is on pace to deliver $8 billion in 12-month revenue. It has double-digit revenue growth for both Xbox and Internet search with Bing. Lastly, MSFT stock trades at just 14 times next year’s earnings. In other words, MSFT is a promising company with a high dividend yield. Buy Microsoft for the long haul and watch the dividend payments continue to rise.

Source: InvestorPlace

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