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Microsoft Corporation (NASDAQ:MSFT) has just announced its annual dividend increase as Seeking Alpha has reported here. This marks the company’s 14th consecutive annual dividend increase and now places the annual dividend at $3/share, which is exactly what I had predicted in my dividend increase preview. However, the point is not to toot my horns but to check how healthy Microsoft’s dividend looks for the long term. I know what you are thinking: it is either (1) why does Microsoft need to be checked? or (2) who cares about the <1% yield? I am addressing #1 directly below while #2 is addressed throughout the article.
One of my favorite TV characters, Mrs. Marie Barone from the wildly successful sitcom Everybody Loves Raymond uttered many gems throughout the nine seasons. One of my favorite lines, “A good mother checks” was uttered by her in response to her elder son claiming he doesn’t smoke. Similarly, a good investor checks. How frequently one does that may vary depending on the underlying stock and company but check you must. Annual dividend increases offer the ideal check-points in my opinion for strong companies like Microsoft, like the annual wellness visits that is recommended for everyone, even healthy individuals.
I have a history of analyzing Microsoft’s dividend increases and with the latest increase in mind, it is time to get Microsoft on the examining table. For ease of comparison, I am going to follow the same structure as my 2022 article. Before that, for the record, my most recent Microsoft coverage was ahead of the company’s Q4 earnings where I warned the stock was a bit pricey, although I expected strong numbers from the company. Since then, Microsoft stock has lost about 5% compared to the market’s 1.70%.
Without further ado, let us now review Microsoft’s dividend increase.
New Yield: The new annual dividend of $3/share gives Microsoft a yield of 0.92%. This is a bit lower than the 1.12% after 2022’s dividend increase. This is…
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