The company has consistently raised its dividend by 3 to 5 cents every year. The dividend has increased 223% from 13 cents in 2010 to the current 42 cents. At the current rate of 42 cents per share for a quarter, the forward annual dividend rate stood at $1.68 with a yield of 1.55%.
The dividends paid out to shareholders in proportion of earnings or cash flow, termed as payout ratio, stood at 77.46%, according to Morningstar.
Meanwhile, Motley Fool states that Microsoft has plenty of room for a dividend hike as it has a low payout ratio of just 43%. These predictions have helped the stock touch a new lifetime high, though many traders continue to remain cautious.
During the recently completed fourth-quarter, Microsoft said it has paid $3.2 billion as dividends and has repurchased about $2.3 billion worth of stocks. The company’s free cash flow has fallen 15% to $7.4 billion.
The Redmond, Washington-based company’s stock has risen more than 53% in the past one year and over 30% year-to-date.