Microsoft Raises Quarterly Dividend 7.7% to $0.98

Microsoft raised its quarterly dividend 7.7% to $0.98 per share from $0.91. The shares trade ex-dividend on November 19, 2026, and the payment is due December 10, 2026, taking the annualized dividend to $3.92 per share.

Why the dividend changed

Microsoft’s declaration did not give a specific reason for the increase beyond the board’s decision. The company announced no split, merger, spin-off or special distribution in connection with the change. The higher regular payment instead follows a fiscal year in which growth in cloud computing and artificial intelligence products lifted revenue and earnings.

Microsoft reported fiscal fourth-quarter revenue of $90.0 billion, up 18%, and operating income of $40.6 billion, also up 18%. Microsoft Cloud revenue rose 27% to $59.3 billion, while Azure and other cloud-services revenue increased 43%. For the full fiscal year, revenue reached $331.8 billion and operating income was $155.2 billion. Those results establish the operating backdrop for the increase, although management did not identify any single result as the reason for it. Microsoft’s earnings release provides the underlying figures.

The competing use of cash is AI infrastructure. On the latest earnings call, Chief Financial Officer Amy Hood said quarterly capital expenditures were $41 billion, while cash flow from operations was $55.4 billion and free cash flow was $19.6 billion. Microsoft expects fiscal 2027 capital expenditures to grow as it expands data-center capacity, but it also expects to remain free-cash-flow positive. Management’s earnings-call commentary shows that the dividend increase comes alongside, rather than instead of, heavy investment.

Microsoft’s annual report says existing liquidity, operating cash flow and access to capital markets are expected to fund dividends, repurchases, debt maturities and material capital expenditures for the foreseeable future. It also says the current share-repurchase authorization has no expiration date, leaving dividends as one component of a broader capital-return program. Microsoft’s 2026 annual report provides that liquidity and capital-allocation context.

Dividend track record

The increase extends Microsoft’s dividend-growth streak to 20 consecutive years. The five-year record has been consistent: the annual total rose from $2.09 in 2020 to $2.30 in 2021, $2.54 in 2022, $2.79 in 2023, $3.08 in 2024 and $3.40 in 2025. The annual increases were 10.1% in 2021, 10.4% in 2022, 9.8% in 2023, 10.4% in 2024 and 10.4% in 2025. The five-year rate was 10.2% annual growth.

Recent quarterly payments show the same step-up pattern. Four payments of $0.83, with ex-dividend dates from November 21, 2024, through August 21, 2025, were followed by four payments of $0.91 through August 20, 2026. The new $0.98 rate starts the next annual cycle. For an investor holding 100 shares, the annual income at the new rate is $392.00.

Is the dividend covered?

The dividend consumes 20% of earnings. That means most reported profit remains available for investment, acquisitions, repurchases, debt service and other corporate needs after the dividend obligation.

SmarterDividends rates the dividend A, with a safety score of 97. That places it in the very safe range of 80-100. The grade reflects strong earnings coverage and a long record of increases, while the company’s elevated infrastructure spending remains the principal cash-flow item to monitor.

Yield and valuation

Microsoft’s forward yield is 0.74%, below the Technology sector median of 1.32%. The gap shows that the shares provide less current dividend income than the typical sector constituent, despite the company’s record of dividend growth.

At a share price of $532.60, Microsoft has a market value of $3954.8 billion and recorded a 6.6% gain over one year. SmarterDividends estimates fair value at $308.36 and classifies the shares as overvalued, equivalent to 41% downside to that estimate. The valuation assessment is separate from the dividend safety grade: the former compares price with estimated value, while the latter evaluates the likelihood that the payment can be maintained.

What to watch

The immediate date is Microsoft’s fiscal first-quarter earnings release on October 28, 2026, according to the company’s investor FAQ. The report and conference call will provide updated information on Azure demand, AI infrastructure spending, margins and free-cash-flow generation.

Dividend investors must own the shares before the November 19, 2026, ex-dividend date to receive the December 10, 2026, payment under standard market settlement. Beyond that payment, the central coverage issue is how operating cash generation develops as Microsoft funds additional data-center capacity. The company’s 20% earnings payout ratio provides substantial accounting coverage, while its next results will update the cash side of that assessment.