Microsoft Placates Shareholders With Another Dividend Hike

by Marc Bastow | September 17, 2013 11:11 am

In the midst of what’s been an eventful few months, Microsoft (MSFT[1]) stepped up and cheered investors with news of a double-digit dividend hike and a stock buyback program.

The first payout comes to 28 cents per share — payable Dec. 12 to shareholders of record Nov. 21, with an ex-dividend date of Nov. 19 — and bumps MSFT’s dividend yield to 2.8%. Microsoft also announced the approval of a new share repurchase program of $40 billion, replacing its current program, which is set to expire at the end of the month.

While MSFT is trading only fractionally higher on the news, that’s better than reactions to many of its other headlines during the past six months:

Perhaps the only consistency from Microsoft is the dividend. It has been raised annually since 2003, improving 250% overall in that time. Meanwhile, MSFT sports $75 billion in cash and reported $29 billion in operating cash flow in 2013.

Income investors should be plenty pleased with this move, at the very least. However, they and the rest of MSFT’s shareholders are probably still holding out for better headlines ahead.

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he was long MSFT

Endnotes:
  1. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  2. restructuring: http://investorplace.com/2013/06/microsoft-working-on-restructuring-its-business-model-msft/
  3. some skepticism: http://investorplace.com/2013/07/microsoft-tries-for-a-reboot/
  4. crushing the stock: http://investorplace.com/2013/07/did-surface-tablets-kill-microsoft/
  5. retire from the company: http://investorplace.com/2013/08/steve-ballmer-stepping-down-at-microsoft/
  6. $7.2 billion purchase: http://investorplace.com/2013/09/can-microsoft-and-nokia-make-phones-that-people-actually-want/
  7. NOK: http://studio-5.financialcontent.com/investplace/quote?Symbol=NOK

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