https://wccftech.com/microsoft-returns-40-billion-dollars-to-investors/

Microsoft (NASDAQ:MSFT) announced during Wednesday’s extended trading hours that its Board of Directors have declared a quarterly dividend of $0.51 per share constituting an increase of 11 percent over the previous quarter’s dividend. The dividend will be paid on 12th December 2019 to shareholders of record on 21st November 2019. The board also authorized a $40 Billion share repurchase program. Consequently, Microsoft’s stock was up 1.3 percent during the after-market hours trading.

According to FactSet, this announced dividend translates into a dividend yield of 1.47 percent based on the stock’s closing price of $138.52. On the other hand, the S&P500 is currently yielding 1.93 percent. Moreover, some analysts have highlighted that the stock, which is currently trading at a multiple that is nearly 24 times the 2020 EPS estimate, is not very attractive from a valuation perspective. Therefore, a stock buyback program at such elevated valuations offers limited utility to investors who would have fared far better with a larger increase in cash dividend. Nonetheless, the cash dividend announced yesterday is nearly double of that announced at the time Satya Nadella replaced Steve Balmer as the CEO which, by any measure, is not an easy feat.