Most investors are drooling over Microsoft's (MSFT +1.11%) jaw-dropping growth story. And let's be honest: With the company's $3 trillion market cap, it's hard not to. But a lesser-known perk to keep an eye on is its consistent dividend rewards to shareholders.
Microsoft declared its first dividend for shareholders in 2003 and has been treating shareholders to consistent dividend increases for nearly two decades. This September, the company stuck to its usual playbook by announcing another dividend hike. Although the dividend yield sits below 1%, which might not excite income-focused investors, this bump could lead to a bigger payout in 2025.
NASDAQ: MSFT
Key Data Points
What will Microsoft pay in dividends in 2025?
Let's take a quick look back at 2024. Microsoft paid a quarterly dividend of $0.75 per share in March, June, and September. Then, on Sept. 16, the tech giant announced it would raise its quarterly dividend to $0.83 per share, which is slated to hit investors' accounts in December. This increase brings the total annual dividend payout to $3.08 per share for 2024.
Let's do the math. With 7.43 billion shares outstanding (according to Microsoft's latest financial reports), the total dividend payout for 2024 comes to a whopping $22.88 billion. Not too shabby.
Assuming Microsoft continues paying $0.83 per share each quarter in 2025, the annual dividend payout would increase to $3.32 per share. If the number of shares remains the same, Microsoft's total dividend payout would rise to approximately $24.67 billion.
A dividend hike and stock buyback can shake things up
Microsoft raised its dividend by over 10% this September, and it wouldn't be surprising if the tech giant repeated this in 2025. Another increase could beef up the annual dividend for shareholders. Also, Microsoft recently announced a $60 billion stock-buyback program, which could reduce the number of outstanding shares if buybacks begin in 2025.
There are a few moving pieces to keep an eye on. But if Microsoft continues its past dividend trends, you could be handsomely rewarded.
