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Microsoft May Raise Dividend After A Gap Of Two Years

Microsoft May Raise Dividend After A Gap Of Two Years

According to an article on Bloomberg, there is a possibility that Microsoft Corp (NASDAQ: MSFT), the world’s largest software manufacturer, may raise its quarterly dividend for the first time since 2008.

MSFT may hike its quarterly dividend to $0.15 a share, from $0.13 per share, increasing the company’s dividend yield to 2.31%, according to the data collected by Bloomberg. The dividend hike may cost Microsoft roughly $700 million annually.

Microsoft, which is expected to declare the biggest sales increase over the past two years, had $39.7 billion in cash and short-term investments as of March 31. With so much cash in the kitty, the company is looking for ways to reward its shareholders post a 21% decline in MSFT's share price over the past quarter, as compared to a 12% fall in the Standard & Poor’s 500 Index.

Michael Holland, the chairman of Holland & Co in New York, said, “They really have to do something… A dividend increase is a way for the board and management to signal their overall business is healthy.” If they don’t increase the dividend, they “would probably send an unintended signal,” he added.

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