Buy Microsoft (MSFT) Stock at Highs for More than Dividend and Buybacks

Microsoft MSFT shares have easily outpaced over the last 12 months the group of five fellow tech giants that Wall Street lovingly named FAANG. Microsoft wasn’t left out of this group maliciously, many likely just assumed that its days of outsized growth were behind the firm that was founded in the mid-1970s.

This, however, is hardly that case, and Microsoft stock appears to be one of safest mega-cap tech buys out there at the moment, even at its new all-time highs.

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Microsoft announced late Wednesday that it raised its quarterly cash dividend and approved a new stock buyback program. The company lifted its dividend to $0.51 per share, which marked an 11% increase from its last quarterly payout of $0.46. This is nothing earth-shattering because Microsoft has raised its quarterly payout every year since it started paying a dividend back in 2004. But it does remind investors once again of the historic tech firm’s strength and stability.

The new payout, which will be payable on December 12 to shareholders of record on November 21, marks a slightly larger increase than last year’s 9.5% boost from $0.42 to $0.46. Meanwhile, MSFT’s board approved a new stock buyback program of up to $40 billion.

Investors should note that this is the third time it has approved a repurchase plan of this scope. Overall, the firm said it bought back approximately $35.7 billion worth of stock between fiscal 2017 and 2019.

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Source: September 19, 2019