💎 MaxDividends Ideas: Microsoft. Deep Dive and PDF Report Inside
10.11% Dividend Growth Over 3 Years and 20 Years of Increases
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10.11% Dividend Growth Over 3 Years and 20 Years of Increases
Let’s dive straight into some standout numbers. Imagine a stock that’s been growing its dividend for 20 straight years with an average annualized growth rate of 10.11% over the last three years.
Add a solid $3.32 annual dividend backed by a manageable 27.39% payout ratio, and you’ve got a recipe for long-term dividend reliability. And that’s just the beginning.
The stock in question?
Microsoft Corporation (MSFT)
Intro
Microsoft Corporation develops and supports software, services, devices and solutions worldwide.
Sector: Technology
Industry: Software - Infrastructure
Market Cap: $ 3.32 T (Large Cap)
Financial Score: 99 / 99
⭐️⭐️⭐️⭐️⭐️+
The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services.
This segment also provides LinkedIn; and dynamics business solutions, including Dynamics 365, a set of intelligent, cloud-based applications across ERP, CRM, power apps, and power automate; and on-premises ERP and CRM applications.
The Intelligent Cloud segment offers server products and cloud services, such as azure and other cloud services.
The company sells its products through OEMs, distributors, and resellers; and directly through digital marketplaces, online, and retail stores.
A Brief History of Microsoft Corporation
Company Overview
Founded in 1975 by Bill Gates and Paul Allen, Microsoft initially focused on software development, particularly for personal computers.
Their mission to enable people and businesses throughout the world to realize their full potential by creating technology that transforms the way people work, play, and communicate
The introduction of the Windows operating system in 1985 marked a significant milestone, leading to widespread adoption and establishing Microsoft as a dominant player in the software market.
As of 2024, Microsoft Corporation has established itself as a leader in the technology industry, continuing its evolution from a software company to a diversified technology and services powerhouse.
Top 3 Competitors
Oracle (USA)
Alphabet Inc (USA) - Undervalued 💡
Apple Inc (USA)
Who Owns Microsoft Corporation
Major Shareholders
As of 2024, the ownership structure of Microsoft Corporation is characterized by a mix of institutional investors, mutual funds, and individual stakeholders. The following table outlines the major shareholders of Microsoft Corporation:
Vanguard Group Inc ~8.40%
BlackRock Inc ~7.40%
Bill Gates ~1.30%
Insider ownership is also a significant aspect of Microsoft's ownership structure. Key executives and board members hold shares in the company, contributing to the overall ownership landscape:
Satya Nadella ~ 1.00%
Brad Smith ~ 0.20%
Two Decades of Dividend Increases
Microsoft’s commitment to its shareholders is no small matter. They’ve raised their dividend every year for the last 20 years, showing an unbroken streak of rewarding investors.
With a dividend yield of 0.74%, it might not look flashy at first glance, but the numbers tell a deeper story.
The payout ratio of 27.39% shows they’re using less than a third of their earnings for dividends, leaving ample room for reinvestment and future increases.
To put it in perspective, if you had invested in Microsoft 10 years ago, your yield on cost today would be significantly higher thanks to its consistent dividend growth.
Microsoft Corp recently declared dividend hike +10,00% in November 2024.
This isn’t just a stock for today—it’s a stock for tomorrow.
A Financial Powerhouse Backing These Dividends
In Q3 2024, Microsoft posted revenue of $60.4 billion, up 12% year-over-year, driven by continued growth in its Azure cloud services and Office 365 subscriptions. Net income? A staggering $22 billion, showing an increase of 9% year-over-year.
This kind of financial performance isn’t just about big numbers—it’s about stability. With over $130 billion in cash and equivalents on their balance sheet, Microsoft has the firepower to maintain and grow its dividends even during economic downturns.
Microsoft Corp - Quick MaxDividends Team Overview
🟢 Statement: Analysis of the latest reports allows us to conclude that the company is successfully generating profit;
🟢 Sales: Business is increasing sales and they are growing, which is a positive thing;
🟢 Profitability: The company's operating profit continues to show positive dynamics in recent years;
🟢 Earnings: The dynamics of earnings per share are positive, the company shows good pace and stability in terms of profitability;
🟢 Overall: The company's business has been successfully overcoming challenges for many years, which is confirmed by its stable profitability.Financial Statement
If you want to stay on top of your portfolio's health, don't forget to check in on the financials of the companies you've invested in. The better shape they’re in, the better your results will be. Keep an eye on their quarterly and annual reports to see how they're performing.
Here is a quick dive into Microsoft Corporation financials over last years
The strongest and most stable companies tend to have a Financial Score of 80+, with the very best ones hitting 90+. If you see that score start to dip below 80, that’s your cue to consider jumping ship before things get worse.
👉 Learn More about Financial Score
In the Premium version, our members get access to a curated watchlist of 19,000 companies worldwide, all scored by our team on a regular basis. Companies like Microsoft Corporation are on that list, too.
Recent Q3 ‘24 changes with Financial Score 99 → 99. MaxDividends Consensus: Stable.
👉 MaxDividends Top Stocks List
Future Outlook
Looking ahead, Microsoft aims to continue its growth trajectory through investments in cloud computing, artificial intelligence, and gaming. The company's strategic initiatives are expected to strengthen its competitive edge and drive long-term shareholder value.
Interesting Fact
A Quiet Leader in Gaming and AI
Here’s a fun fact for you: Microsoft isn’t just about software and cloud computing. It’s now one of the largest players in the gaming industry thanks to its Xbox ecosystem and recent acquisition of Activision Blizzard.
Combined with its aggressive push into AI, including integrating OpenAI’s models into its products, Microsoft is setting itself up for massive growth in multiple high-demand sectors.
Buy Microsoft Now? Current Market Value
Undervalued \ Overvalued \ Fairly valued
Compare competitor companies` P/E ratios to find out if the stocks you`re looking to trade are overvalued. We take the P/E average among competitors.
If a company`s current P/E is 20% or more lower than its competitor`s average, the company is considered undervalued. If it is higher by 20% or more, it is overvalued.
P/E ratio is calculated by dividing the market value per share by the earnings per share (EPS).
⚪️ Fairy Valued
Compared to competitors and companies with business in this industry, the company is fairly valued. A price reduction of 15-20% would be a great investment point.
Two More Points
The company's dividend yield today is lower than the average dividend yield over the past 10 years average. This may indicate that the company is fairy valued \ overvalued by the market.
The company's current earnings per share are lower than the average earnings per share over the past 10 years.
This may indicate that the company is fairy valued \ overvalued by the market.
Here’s the bottom line: Microsoft isn’t just a dividend stock—it’s a powerhouse of growth and stability. Between its 20 years of dividend increases, a 10.11% three-year growth rate, and a low 27.39% payout ratio, this stock is designed to deliver value now and in the future.
Final Thoughts
Microsoft is a great company with a very stable position and dominates many business and technology segments.
I consider Microsoft a growth-focused company best for capital gains. Here's why.
Dividend growth over the last 10 years has been about 10% dividend increase annually. With the current dividend yield of 0.74% per annum, we can expect ~ 2.00% in 10 years.
However, over the last 10 years, the company has returned over 20% annually on investment. Dividends are an additional great bonus, increasing the overall return on investment.
Sector: Technology
Current Market Value: Fairy Valued
Type: Growth Focused
Financial Score: 99 / 99
⭐️⭐️⭐️⭐️⭐️+
Recent Q3 ‘24 changes with Financial Score 99 → 99. Stable.
That’s all for to today.
With respect for your well-being, Max
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