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Sep
18
Jonathan Yates
Microsoft Proves “Old School” Investing Can be Even More Rewarding
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Previously, on this site, it was detailed how “Old School” investing in tech stocks such as Microsoft (NASDAQ: MSFT), Intel (NASDAQ: INTC), and Apple (NASDAQ: AAPL) can be very rewarding.  In addition to the strong product line for each and robust margins, all now pay high dividends, as pointed out in, “Is “Old School Tech Still the Best Way to Invest?.”  Microsoft just rewarded its shareholders even more with a 40% dividend increase and share buyback program.

It was not that long ago that high tech concerns such as Intel, Microsoft, and Apple did not pay dividends to shareholders.

Executive management at the companies felt that the shareholders would be better rewarded by their investing the money.  Rather than dividends, billions was spent on acquisitions, new products, and research and development costs, among other areas.  Eventually, shareholder pressure resulted in the payment of dividends.

At present, Microsoft, Apple, and Intel all pay dividends higher than the average of around 2% for a member of the Standard & Poor’s 500 Index.

Microsoft has a dividend yield of 2.79%.  Intel provides it shareholders with an income stream coming in at 4.79%.  Those owning Apple stock reveive dividend payments at the rate of 2.68%.

With the move by Microsoft to raise its dividends, it is likely that Apple and Intel will follow.  As dividends have provided more than 40% of the total historic return for equities, according to legendary investor Jack Bogle in his book “Enough”, that will do much to reward shareholders over the long term.  The recent move by Microsoft that is very shareholder friendly proves, again, that “Old School” tech investing can be very profitable!

 



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