Microsoft Corp. announced a big boost for its shareholders by increasing its quarterly dividend by 10% and launching a new $60 billion stock buyback plan. This news caused Microsoft’s shares to rise by up to 2.4%.
In a statement made on Monday, Microsoft said that shareholders will receive a quarterly dividend of 83 cents per share, up from the previous 75 cents. This dividend will be paid to shareholders on record as of November 21. The new buyback plan replaces a similar $60 billion plan from 2021 and has no set end date.
Although $60 billion is a huge amount, it represents less than 2% of Microsoft’s total market value. The company’s stock has risen 31% in the past year, bringing its market value to $3.2 trillion. Microsoft typically spreads out its stock buybacks over several years, having spent $17 billion on repurchases in the fiscal year ending in June 2023.
At 10:02 a.m. in New York, Microsoft’s shares were up 1.7%, trading at $438.74.
Stock performance and AI integration
Recently, Microsoft’s stock has been reaching record highs, largely due to excitement about the company’s advancements in artificial intelligence (AI). Microsoft has integrated AI from its partner OpenAI into several of its products like Teams, Word, and Outlook, showcasing how these tools can improve business applications. On Monday, Microsoft also introduced a new suite of AI tools.
As of June 30, Microsoft had $75.5 billion in cash and equivalents. In July, the company reported free cash flow of $23.3 billion for the fiscal fourth quarter, an 18% increase from the previous year, supported by higher investments in its cloud and AI services.
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