How Microsoft Built a Reliable Dividend Track Record in a Growth-Focused Sector

Microsoft Corporation (NASDAQ:MSFT) is one of the 10 Technology Dividend Aristocrats to Buy in 2025.

Microsoft Corporation (NASDAQ:MSFT) surprised Wall Street in 2003 when it announced its first-ever dividend, especially since the company was dealing with costly antitrust challenges at the time. Analysts viewed the move as a smart step, both financially and strategically. Today, the dividend is seen as one of Microsoft’s key strengths. What began as a $0.16 per share payout has since grown to $0.83 per share.

This level of dividend growth is particularly impressive for a company rooted in the growth-oriented tech sector. Microsoft Corporation (NASDAQ:MSFT)’s five-year dividend growth rate of 10.3% shows that it’s possible to balance both income and expansion.

While its 20-year streak of dividend increases often flies under the radar, especially with a yield of less than 1% at current prices, Microsoft Corporation (NASDAQ:MSFT)’s dividend outlook remains strong. The company has a healthy balance sheet, with more cash than debt and a low payout ratio, giving it plenty of room to continue raising dividends well into the future. In addition, the stock has delivered a return of nearly 955% in the past decade, outperforming the broader market, which returned just 183% during this period.

While we acknowledge the potential of MSFT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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