July 05, 2025 a 07:46 am
MSFT: Dividend Analysis - Microsoft Corporation
Microsoft Corporation, a leading technology conglomerate, exhibits a robust dividend payment history with consistent growth reflective of its financial strength and strategic market position. Despite a comparatively low dividend yield, the company's emphasis on steady dividends with a substantial growth rate demonstrates its commitment to rewarding shareholders. Investors may find the stability and growth trajectory appealing, though the relatively modest dividend yield highlights a focus on reinvesting profits for continued innovation and market leadership.
📊 Overview
This section provides an overview of Microsoft's dividend profile, highlighting key financial metrics and historical performance indicators.
| Metric | Details |
|---|---|
| Sector | Technology |
| Dividend Yield | 0.67% |
| Current Dividend Per Share | $2.93 |
| Dividend History | 23 years |
| Last Cut or Suspension | None |
📈 Dividend History
Microsoft's well-documented dividend history underscores its financial robustness and commitment to shareholder value through consistent payouts.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | $2.49 |
| 2024 | $3.08 |
| 2023 | $2.79 |
| 2022 | $2.54 |
| 2021 | $2.30 |
📈 Dividend Growth
The progressive increase in Microsoft's dividend payouts illustrates its sound financial management and profit allocation towards enhancing shareholder return.
| Time Period | Growth |
|---|---|
| 3 years | 10.22% |
| 5 years | 10.26% |
The average dividend growth is 10.26% over 5 years. This shows moderate but steady dividend growth.
🗣️ Payout Ratio
Payout ratios reveal how much of a company's earnings are distributed as dividends, providing insights into sustainability and financial strategy.
| Key Figure | Ratio |
|---|---|
| EPS-based | 22.54% |
| Free Cash Flow-based | 31.39% |
With an EPS-based payout ratio of 22.54% and a Free Cash Flow-based ratio of 31.39%, Microsoft's dividend payouts appear sustainable, reinforcing its financial health and prudent management.
🏦 Cashflow & Capital Efficiency
Microsoft's cash flow and capital efficiency indicators show its adeptness in effectively managing financial resources to maximize shareholder value.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Free Cash Flow Yield | 3.38% | 2.35% | 2.18% |
| Earnings Yield | 3.78% | 2.85% | 2.60% |
| CAPEX to Operating Cash Flow | 26.83% | 32.09% | 37.52% |
| Stock-based Compensation to Revenue | 4.54% | 4.54% | 4.38% |
| Free Cash Flow / Operating Cash Flow Ratio | 73.17% | 67.91% | 62.48% |
Microsoft's cash flow metrics and capital efficiency reflect robust operational control, enabling sustained reinvestment in growth while maintaining ample liquidity.
⚖️ Balance Sheet & Leverage Analysis
The analysis of Microsoft's balance sheet metrics offers insights into its leverage management, financial stability, and overall capital structure.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Debt-to-Equity | 36.79% | 29.08% | 25.00% |
| Debt-to-Assets | 16.79% | 14.56% | 13.11% |
| Debt-to-Capital | 26.89% | 22.53% | 20.00% |
| Net Debt to EBITDA | 47.23% | 24.03% | 21.15% |
| Current Ratio | 1.78 | 1.77 | 1.27 |
| Quick Ratio | 1.75 | 1.75 | 1.27 |
| Financial Leverage | 2.19 | 2.00 | 1.91 |
Leverage ratios indicate Microsoft's prudent financial management, ensuring efficient use of debt financing while maintaining sufficient coverage and liquidity buffers.
🌟 Fundamental Strength & Profitability
Microsoft's fundamental strength through profitability metrics highlights its competitive advantage and operational excellence in generating investor returns.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Return on Equity | 43.68% | 35.09% | 32.83% |
| Return on Assets | 19.94% | 17.56% | 17.21% |
| Net Margin | 36.69% | 34.15% | 35.96% |
| EBIT Margin | 43.26% | 43.07% | 45.17% |
| EBITDA Margin | 50.56% | 49.61% | 54.26% |
| Gross Margin | 68.40% | 68.92% | 69.76% |
| Research & Development to Revenue | 12.36% | 12.83% | 12.04% |
The company's high profitability and operational efficiency underscore its competitive market positioning and long-term value creation strategy.
📉 Price Development
🌟 Dividend Scoring System
Evaluating Microsoft's dividend performance using a comprehensive scoring approach:
| Criteria | Score | Rating |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 5 | |
| Financial stability | 5 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Overall Score: 36 out of 40
⭐ Rating
Microsoft Corporation exhibits exceptional financial quality with consistent dividend payments, robust cash flow management, and market-leading profitability. The comprehensive score of 36 out of 40 affirms its standing as a secure dividend investment. This stability, coupled with strong growth metrics, makes Microsoft a worthy consideration for investors prioritizing sustainable income and capital appreciation.