A new dividend increase for my Vrijheid Fonds by Microsoft.
This week Microsoft (MSFT) announced a 10.9% increase in its quarterly. The dividend is raised from $0.46 to $0.51. The dividend pay date is December 12, 2019 to shareholders of record on November 21, 2019 (ex-dividend November 20, 2019).
The new dividend amount represents an annualized dividend amount of $2.04 per share, up from $1.84. The dividend yield on current price is 1.47%.
My Vrijheid Fonds consist of 32 shares of Microsoft, so my annual dividends will increase by €4.92 ($ 5.44). For 2019 my dividends will increase by € 1.23 ($ 1.36) after taxes.
My projected annual total amount from my shares of MSFT will be € 50 ($ 55) after taxes.
Furthermore, Microsoft’s board also approves the buyback plan ($40B), which represents about 4% of the company’s current market value.
By buying back shares the company is effectively reducing its outstanding shares on the market. And if there are fewer shares outstanding the EPS (Earning Per Share) will be affected by this action. Normally when a company announces a share buyback, investors get excited and the share price will also go up.
Normally is $40B a lot of money, but not for MSFT. They have $133bn of cash and marketable securities on hand. So, it is not a big buyback. But at current all-time high share prices, this buyback plan could have waited in my humble opinion. But hey, what do I know. I’m just a amateur.
But all-in-all, I’m happy with this increase of their dividend and I like the buyback plan. J