Microsoft (MSFT) Unveils $60 Billion Stock Buyback Program in 2025 with 11% Dividend Boost

Microsoft Corporation (MSFT) has announced a substantial $60 billion stock repurchase initiative, signaling strong confidence in its growth and shareholder value strategy. Alongside this, the company raised its quarterly dividend from 56 cents to 62 cents, effective for shareholders of record as of November 18, with payments scheduled for December 9.

This new buyback program, which does not have a fixed timeline and can be halted at any moment, marks Microsoft's continued commitment to returning capital to investors. Since 2013, Microsoft has consistently launched buyback programs approximately every three years, including $40 billion initiatives in both 2013 and 2016. The current announcement coincides with the winding down of its 2019 $40 billion program, of which $23 billion has already been utilized this year, leaving $8.7 billion remaining.

Key Highlights

• Microsoft's board approved a $60 billion stock buyback plan in 2024.
• The quarterly dividend was increased by 11%, from 56 cents to 62 cents per share.
• The announcement follows political discussions around a proposed 2% excise tax on corporate share repurchases.

Impact on Shareholders and Market Context

This announcement arrives amid growing political scrutiny, particularly from Democratic lawmakers advocating for a 2% excise tax on share buybacks by publicly traded companies. Despite a pandemic-induced dip, stock repurchases have rebounded strongly, with companies spending trillions on buybacks in recent years to enhance shareholder value.

Within the tech sector, Microsoft’s rivals are also heavily engaged in buybacks. Apple Inc. (AAPL) has spent $77 billion on repurchases over the past year, Alphabet Inc. (GOOGL) allocated $11.4 billion in the recent quarter, and Meta Platforms (FB) invested $3.9 billion. Critics argue that such buybacks artificially inflate stock prices and earnings per share, creating scarcity and driving valuations higher.

Microsoft’s aggressive buyback strategy has contributed significantly to its stock price growth, which has more than doubled from $130.90 in September 2019 to over $300 today, making it the world’s second most valuable publicly traded company after Apple. This momentum is supported by strong product demand, especially during the pandemic, and rapid expansion of its cloud services.

Additionally, Microsoft has steadily increased shareholder returns, with dividends rising from $0.36 per share in early 2016 to $0.56 in late 2019. Over the same period, annual capital returned through dividends and buybacks grew by $5.5 billion and $10 billion respectively. By April 2024, these buybacks had reduced Microsoft’s outstanding shares by approximately 1%.

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