When does Microsoft pay dividends? Microsoft Corporation, one of the world’s largest technology companies, pays dividends to its shareholders on a regular basis. Dividends are a portion of the company’s profits distributed to its shareholders as a return on their investment. Microsoft has a long history of paying dividends and has consistently increased them over time. In this article, we will explore when Microsoft pays dividends and answer some frequently asked questions about their dividend policy.
When does Microsoft pay dividends?
Microsoft Corporation’s (MSFT) dividend yield is 0.91%, which means that for every $100 invested in the company’s stock, investors would receive $0.91 in dividends per year.
Microsoft Corporation’s payout ratio is 27.36% which means that 27.36% of the company’s earnings are paid out as dividends. A low payout ratio may indicate that the company has a strong financial position and can invest in growth opportunities, while a high payout ratio may indicate that the company is returning most of its earnings to shareholders. MSFT’s annual dividend is $3.00 per share. This is the total amount of dividends paid out to shareholders in a year.
Microsoft Corporation’s (MSFT) ex-dividend date is November 15, 2023, which means that buyers purchasing shares on or after that date will not be eligible to receive the next dividend payment.
Microsoft Corporation (MSFT) pays dividends on a quarterly basis. The next dividend payment is planned on December 14, 2023. Microsoft Corporation (MSFT) has increased its dividends for 18 consecutive years. This is a positive sign of the company’s financial stability and its ability to pay consistent dividends in the future.
How much of a dividend does Microsoft pay?
The last known full dividend for Microsoft stock is the dividend that was paid in 2022 for the year 2021. This dividend was in the amount of $2.48 per share and was paid in four instalments of $0.62
Remember that last year, in 2021, the annual dividend paid by Microsoft to its shareholders was $2.24 with four payments of $0.56.
When is the Microsoft dividend paid?
Microsoft’s dividend is paid each year based on the previous year’s financial results. Thus, the 2022 dividend corresponds to the 2021 financial year. But before the dividend is paid, it must be decided by the board of directors and voted on by the annual shareholders’ meeting.
Like most other publicly traded US companies, the Microsoft Group has a quarterly dividend payment schedule, which means that it is paid in four installments with an interim dividend in December of the previous year.
In 2022, for example, Microsoft’s first interim dividend was detached on 17 November 2021 and paid on 09 December, the second was detached on 17 February and paid on 11 March, the third was detached on 18 May and paid on 09 June and the fourth will be detached on 17 August and paid on 08 September.
What is the next expected dividend for Microsoft shares?
The next dividend that has been announced by Microsoft is the 2022 dividend on the 2021 financial year. This is a total of $2.48 per share and the first three interim dividends of $0.62 were paid in December 2021, February 2022 and May 2022. The final payment of $0.62 will be made in September 2022.
This dividend of $2.48 per share is thus higher than the previous dividend of $2.24 per share, which was paid in 2021.
Microsoft stock dividend history:
Although Microsoft has been a profitable company for a very long time, it has only been paying a dividend to its shareholders since 2003. This means that the company has been paying a dividend to its shareholders for almost 20 years without interruption. We propose you to discover the history of the amount of this dividend over the last ten years as well as its evolution.
- In 2021, Microsoft’s dividend was $2.24 with a 10.05% increase
- In 2020, Microsoft’s dividend was $2.09 with a 10.58% increase
- In 2019, the Microsoft dividend was $1.89 with an increase of 9.88%.
- In 2018, the Microsoft dividend was $1.72 with an increase of 8.18%.
- In 2017, Microsoft’s dividend was $1.59 with an increase of 8.16%.
- In 2016, Microsoft’s dividend was $1.47 with an increase of 13.95%.
- In 2015, Microsoft’s dividend was $1.29 with an increase of 12.17%.
- In 2014, Microsoft’s dividend was $1.15 with an increase of 18.56%.
- In 2013, Microsoft’s dividend was $0.97 with an increase of 16.87%.
- In 2012, Microsoft’s dividend was $0.83 with a 22.06% increase
As you can see, Microsoft’s dividend tends to increase over time. Over the last ten years, the dividend has increased by an average of 11.29% per year, which is a particularly high rate of increase, especially compared to the industry average.
What is the dividend yield on Microsoft shares?
It is not enough to analyse the amount of the Microsoft share’s yield to assess its profitability. The yield, which is based on both the amount of the dividend and the share price, is much more meaningful. The dividend amount is divided by the share price to obtain this yield.
The dividend paid by Microsoft in 2022 showed a yield of 1.01%.
The Payout Ratio of Microsoft is also an important point to study. This is currently 24.63%, which means that the company is not dipping too much into its profits to pay its shareholders.
What is the multi-year dividend yield on Microsoft shares?
Over the past 10 years, Microsoft Group has paid a dividend with an average yield of 2.11%, which is above its 2021 yield. Here is its history:
- In 2021, the dividend yield was 0.76%.
- In 2020, this dividend yield was 0.96%.
- In 2019, this dividend yield was 1.33%.
- In 2018, the dividend yield was 1.53%.
- In 2017, the dividend yield was 2.12%.
- In 2016, the dividend yield was 2.48%.
- In 2015, the dividend yield was 2.62%.
- In 2014, the dividend yield was 2.48%.
- In 2013, the dividend yield was 2.80%.
- In 2012, the dividend yield was 2.63%.
Dividend Payout: Policy and Practices
Microsoft was started, with remarkable success, by Bill Gates and Paul Allen in 1975. Over the next few years, the company established itself as the premier software company in the world. Windows became the standard operating software that everyone installed on their computers. The company earned large profits and accumulated huge cash flows over the years.
However, Microsoft did not pay dividends to its shareholders for the first 28 years of its existence. Then, in 2003, it announced what CFO John Connors (quoted in CBS News, 2003) called ‘a starter dividend’ of US$0.08 per share.
A year later, on 20 July 2004, Microsoft stunned the financial markets by announcing plans to pay the single largest cash dividend in the history of the US corporate sector, a one-time dividend of US$3 per share amounting to US$32 billion. In addition, Microsoft announced plans to repurchase up to US$30 billion of its stock over the next four years and pay regular quarterly dividends at an annual rate of US$0.32 per share.
Over the years, Microsoft has been steadily enhancing its dividend payout. The dividend has increased from US$0.32 to US$1.47 per share which amounts to an annual cash outflow of over US$11 billion. Some analysts have started terming Microsoft as a dividend play; they recommend buying Microsoft for its dividend yield and not for potential capital gains. A software company as a dividend play? That too a market leader!
What is the significance of the company’s ‘no dividend’ policy prior to 2003 and the high dividends now? Is the dividend policy immaterial, as the Modigliani–Miller Model claims, or does it have a significance beyond just the dividend yield a shareholder obtains?
- A company can use its earnings in four ways:
- Retain and invest in long-term projects
- Pay off liabilities
- Pay cash dividends to shareholders
- Repurchase its own equity (stock buyback)
Cash dividends and the repurchase of equity transfer funds from the company to the shareholders and are the primary means by which shareholders earn from their investments in the company.
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