Microsoft Dividend and Buyback Program 2024
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Questions and Answers

What is Microsoft's current dividend yield?

  • 0.5%
  • 0.77%
  • 1.0%
  • 0.7% (correct)

Which company ranks lower than Microsoft in dividend yield?

  • Salesforce Inc. (correct)
  • Visa Inc.
  • Meta Platforms Inc.
  • Apple Inc. (correct)

What is the size of Microsoft's new buyback program?

  • $75 billion
  • $70 billion
  • $60 billion (correct)
  • $50 billion

Who has announced a higher buyback program than Microsoft in 2023?

<p>Chevron Corp. (B)</p> Signup and view all the answers

What is a common characteristic of hot technology stocks regarding dividends?

<p>Lower dividend yields (A)</p> Signup and view all the answers

Which company has the largest buyback program announced in 2023?

<p>Apple Inc. (D)</p> Signup and view all the answers

What future trend is expected for Microsoft's capital expenditures?

<p>Increase in AI investments (D)</p> Signup and view all the answers

What is the implication of Microsoft's new dividend on its ranking among dividend payers?

<p>It will rise to fourth to last (B)</p> Signup and view all the answers

What is the projected free cash flow for Microsoft for fiscal 2025?

<p>$70 billion (D)</p> Signup and view all the answers

What growth rate is expected for Microsoft's free cash flow beyond fiscal 2025?

<p>Double-digit growth (C)</p> Signup and view all the answers

What is the purpose of Microsoft's new $60 billion program?

<p>Stock buybacks (B)</p> Signup and view all the answers

What will the projected free cash flow be enough to cover?

<p>Dividend payments and business investments (C)</p> Signup and view all the answers

Who is the analyst that commented on Microsoft's financial outlook?

<p>Zelnick from Deutsche Bank (D)</p> Signup and view all the answers

What percentage increase did Microsoft announce for its quarterly dividend?

<p>10% (C)</p> Signup and view all the answers

What other company is mentioned in relation to buybacks in the context?

<p>Apple (C)</p> Signup and view all the answers

What is the new dividend payout per share announced by Microsoft?

<p>$0.83 (C)</p> Signup and view all the answers

What does the phrase 'companies are lousy market timers' imply about stock buybacks?

<p>The timing of stock buybacks often does not coincide with optimal market moments. (D)</p> Signup and view all the answers

Which financial metric is Microsoft expected to achieve growth in for the coming years?

<p>Free cash flow (D)</p> Signup and view all the answers

When will the new dividend payment be payable to Microsoft shareholders?

<p>December 12 (C)</p> Signup and view all the answers

What does the new buyback program amount to?

<p>$60 billion (D)</p> Signup and view all the answers

Which analyst commented on Microsoft's capital allocation framework?

<p>Brad Zelnick (C)</p> Signup and view all the answers

How many U.S. companies have announced larger buyback programs than Microsoft's latest?

<p>Three (A)</p> Signup and view all the answers

What has the latest announcement from Microsoft suggested about its management and board's commitment?

<p>Commitment to profitable growth (A)</p> Signup and view all the answers

How does Microsoft's implied yield compare to other companies on the Dow Jones Industrial Average?

<p>Near the bottom (D)</p> Signup and view all the answers

Flashcards

Microsoft dividend hike

Microsoft increased its quarterly dividend by 8 cents, or 10%, to 83 cents per share.

Ex-dividend date

The date that determines which shareholders will receive the dividend payment.

Microsoft buyback

Microsoft increased its stock buyback program to $60 billion.

Capital allocation framework

Microsoft's strategy for distributing profits to shareholders through dividends and buybacks.

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Dow Jones Industrial Average (DJIA)

A stock market index that tracks the performance of 30 large publicly owned companies.

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Dividend yield

The dividend paid per share, expressed as a percentage of the stock price.

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Shareholder-friendly moves

Actions taken by a company to benefit its shareholders.

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AI-driven investment cycle

Microsoft investing in artificial intelligence and hoping to benefit in return from this growing field.

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Microsoft's Dividend Yield

Microsoft's dividend yield is currently 0.7%, ranking it near the bottom of the 27 dividend-paying companies.

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Microsoft's New Dividend

Microsoft's new dividend implies a yield of 0.77%, boosting its ranking to fourth-to-last.

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Hot Tech Stocks

Hot technology companies often have lower dividend yields because they prioritize investment over dividend payouts.

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Microsoft Buyback Program

Microsoft is launching a $60 billion buyback program, placing it among the top three largest in the US for 2024.

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Apple and Alphabet buybacks

Apple and Alphabet announced even larger stock buyback programs at $100B and $70B in 2024, respectively.

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Chevron's Buyback Program

Chevron is the only company (besides Apple and Alphabet) that has announced a buyback program larger than $60 billion.

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Capital Expenditures

Microsoft anticipates increasing capital expenditures due to intense competition in AI development with other tech giants.

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2021 Microsoft Buyback

Microsoft's current $60 billion buyback program matches the size of its 2021 program.

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Microsoft's Free Cash Flow

Microsoft is projected to generate significant free cash flow (over $70 billion) in fiscal 2025 and beyond.

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Dividend & Buyback Strategy

Microsoft's strategy to allocate profits includes paying dividends and repurchasing stock.

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Sufficient Cash Flow

Microsoft's projected free cash flow is more than enough to cover dividends, share buybacks, and other business investments.

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Stock Buyback Program

Microsoft increased its stock buyback program to $60 billion.

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Free Cash Flow Projection

Analysts predict double-digit growth in Microsoft's free cash flow for several years beyond fiscal 2025.

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Fiscal Year 2025

A period of time when Microsoft expects to achieve high free cash flow.

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Shareholder Returns

Microsoft's actions aim to effectively return profits to shareholders.

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Analyst Opinion

A financial analyst believes Microsoft will have enough free cash flow to cover shareholder payouts.

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Study Notes

Microsoft Dividend Hike and Buyback Program

  • Microsoft increased its quarterly dividend by 8 cents (10%), to 83 cents per share.
  • The dividend is payable December 12, 2024, to shareholders of record as of November 21, 2024.
  • Microsoft also announced a $60 billion stock buyback program.
  • This buyback program is the third largest announced in the US this year.
  • The only companies with bigger buyback programs are Apple ($100 billion) and Alphabet ($70 billion).
  • Microsoft's dividend yield is relatively low (0.7%) compared to other Dow components.
  • Microsoft's dividend hike and buyback program are signaling continued, profitable growth and a commitment to free cash flow generation, particularly in the current, elevated AI-driven investment cycle.
  • The move is viewed as a continuation of existing capital allocation strategies, as opposed to a significant change in direction.

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Related Documents

Microsoft Buyback Program 2024 (PDF)

Description

Explore the recent announcements from Microsoft regarding an increase in its quarterly dividend and a significant stock buyback program. With a focus on profitability and growth, Microsoft's strategies reflect its commitment to cash flow generation amidst the ongoing AI investment cycle. Learn more about how these moves compare to other major firms.

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