- Share repurchase plan replaces previous $60 billion program
- Buyback agreement is less than 2% of Microsoft’s market value
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September 17, 2024 at 5:09 AM GMT+7
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Microsoft Corp. raised its quarterly dividend 10% and unveiled a new $60 billion stock-buyback program, matching the size of a repurchase plan three years ago.
The software company said shareholders as of Nov. 21 will receive a quarterly dividend of 83 cents a share, compared with the current 75 cents. The share repurchase agreement, which has no expiration date, replaces a buyback program announced in 2021 that was also $60 billion.
While the figures are sizable in absolute terms, the buyback agreement represents less than 2% of Microsoft’s market value. The Redmond, Washington-based company’s shares have gained 31% in the past 12 months, taking its market value to $3.2 trillion as of Monday’s close. Microsoft spreads its share purchases over several years, and they totaled about $17 billion in the fiscal year ending in June, according to data compiled by Bloomberg.
The shares rose about 1.3% in premarket trading on Tuesday, before New York exchanges opened, after closing at $431.34.
Microsoft’s stock has been pushed to new historical highs in the last several months as investors bet on gains from its push into artificial intelligence. The software maker has infused its product line with technology from its partner OpenAI and has touted the tools’ abilities to augment business applications, such as Teams, Word and Outlook. Microsoft earlier Monday released a new range of AI tools.
Microsoft had $75.5 billion in cash and equivalents as of June 30, according to data compiled by Bloomberg. Free cash flow in the fiscal fourth quarter was $23.3 billion, the company said in July, “up 18% year-over-year reflecting higher capital expenditures to support our cloud and AI offerings.”
(Updates with market capitalization context in third paragraph)