Microsoft (NASDAQ:MSFT) might have a dividend, but it’s just as bad as Apple in many respects. The software giant has stubbornly kept its payout ratio low. Microsoft thought it would make a splash with its biggest dividend increase ever in 2011 that hiked payouts from 64 cents annually to 80 cents — a 25% boost. Unfortunately, shareholders still are getting shafted even after that substantial increase.
Microsoft has projected earnings per share in fiscal 2012 of $2.73. That means Microsoft is painfully average among S&P cheapskates, with a 29% payout ratio. Some Apple fans can give the company a pass under the (mostly false) pretense that it still is a high-growth tech stock and needs its war chest to invest in itself. But Microsoft is painfully mature, and its dividend should reflect that.
Adding insult to injury is the fact that the company has spent more than $80 billion on stock buybacks in the last decade — while shares have stayed flat. Here’s hoping MSFT starts just giving that cash back to shareholders going forward instead.