Microsoft’s Higher Dividend Comes with a Modest Yield and Heavy AI Spending

Microsoft Corporation (NASDAQ:MSFT) has raised its quarterly dividend to $0.98 per share from $0.91, an increase of 7 cents, or about 8%. The new dividend is payable on December 10 to shareholders of record as of November 19. This marks another annual increase for Microsoft and extends its dividend-growth streak to 23 consecutive years. At the new rate, Microsoft will pay $3.92 per share annually. Based on the stock price around the time of the announcement, that translates to a dividend yield of roughly 0.8%. That is a modest yield, so Microsoft's appeal as a dividend stock comes less from current income and more from the combination of dividend growth and the company's ability to generate substantial cash.