The technology sector isn’t known for paying out juicy dividends. Companies from the high-growth sector tend to re invest their cash into expanding instead of returning it to investors.
However, 17 years after the dot-com bubble popped in March of 2000, a group of former tech highflyers is quietly evolving into some of the best dividend payers in the S&P 500.
Apple, Inc. (NASDAQ: AAPL) is a great example. Apple began paying a dividend in 2012, and now offers a 1.6% yield after growing its dividend by 27% in the last three years.
With more than $200 billion in cash, I expect Apple to continue growing its dividend for years to come.
While those stats are impressive, another legendary tech stock offers a better dividend yield and growth. This global leader pays out a 2.4% yield, a 50% premium to Apple’s 1.6% yield. It has grown its dividend by 44% in the last three years, a 63% premium to Apple.
And finally, with just over $100 billion in cash on its balance sheet, I am expecting its dividend payment to grow more than 100% in the next five years.
The company, Microsoft Corporation (NASDAQ:MSFT) is one of the greatest growth stocks in the history of the Nasdaq. Since going public in 1986, shares are up more than 66,420%.
That means $1,000 invested back then would now be worth $6.6 million today. Take a look at the impressive run below.
If you missed out on those gains, don’t worry. Today, there’s a new way to cash in on the company — MSFT dividends.
Microsoft Has Reliably Paid A Quarterly Dividend Since 2007
Microsoft made its first ever dividend payment back in February of 2007, just over ten years ago. At the time, it was big news. It was somewhat unusual for big technology companies to initiate a dividend.
The first MSFT dividend came in at just $0.10. Since then, its payment has grown to 40 cents per share, close to a 300% increase in 10 years. Take a look below.
That has Microsoft’s 5-year dividend growth rate clocking in at 17.7%, a rate that beats 67% of its industry peers.
That’s already an impressive start to a dividend program. It’s clear Microsoft is committed to rewarding investors with big-time dividend growth. But this is just the tip of the iceberg. Looking forward, I am expecting Microsoft’s dividend to grow more than 100% in the next five years.