Microsoft’s Dividends Surpass Stock Buybacks: Implications for Investors

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Microsoft’s Fiscal 2026 Dividend and Buyback Summary

In its fiscal 2026 report, Microsoft declared $27.0 billion in dividends while repurchasing $16.7 billion of its stock, marking a significant shift as dividends have surpassed buybacks since fiscal 2024. The company’s share count decreased by approximately 0.1% to 7.43 billion, evidencing a long-term decline of 1% over five years.

Microsoft achieved earnings per share of $17.95, a 123% increase from five years prior, with net income rising to $133.7 billion—a 31% increase from the previous fiscal year. The dividend payout ratio is stable at around 20%, supporting the likelihood of future increases.

Additionally, the company’s cash allocation for dividend and repurchase spending has decreased from over 70% of net income five years ago to about a third, allowing for greater investments in growth areas such as cloud infrastructure and artificial intelligence.

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