At long last, Microsoft's (MSFT 0.59%) mobile-first, cloud-first transition is showing signs of life. Many of us have been suggesting for much of the past year that new-ish CEO Satya Nadella and team were on the right track, but needed some time to right their ship. The work's hardly over, but Microsoft's most recent quarter -- fiscal 2015's Q1 -- is more a confirmation its efforts to transition to a focus on cloud and mobile revenues is taking hold, though it is not complete by any means.

But even the biggest naysayers have to admit now that Microsoft is gaining steam, and investors have certainly stood up and taken notice. Up over 23% year-to-date, Microsoft's stock price is mirroring its solid performance -- and let's not forget fiscal Q1's dividend hike of $0.03 a share, announced last month, bumping its yield to about 2.7%. But the dividend boost, coupled with Microsoft's solid quarter, begs the question: do shareholders deserve more?

Boosting shareholder value
There are a number of ways to boost shareholder value, including share buy-back initiatives, strategic acquisitions, investing in new technologies to enhance product line-up, and, of course paying shareholders a dividend, to name a few. Microsoft, to its credit, has implemented all of the above within the last year, which is partially responsible for its stellar stock price run.

It was about this time last year that Microsoft announced a $40 billion share buyback program, and there are about 100 million shares less outstanding today than there were in 2013. And there has been no shortage of acquisitions -- the company brought gaming king Mojang and its monster hit Minecraft in-house, and closed a Nokia devices and services deal, among others.

As for investing in new technologies, in addition to expanding its suite of industry-leading cloud solutions -- a business that grew nearly 130% last quarter -- Microsoft unveiled a host of new smartphones and its pseudo-tablet, the Surface Pro 3. In fact, it was Microsoft's Surface sales of $908 million, led by the Pro 3, which was responsible for much of the good press from both investors and industry pundits this past quarter. Then, of course, Microsoft boosted its dividend and now pays its shareholders $0.31 each quarter. Not bad, but not enough.

More is better
Deciding how to share wealth is hardly a Microsoft-specific question. After years of grumbling, Microsoft's mobile nemesis Apple (AAPL -0.69%) finally broke down and shared its ever-growing cash hoard with shareholders in the form of a dividend, after a nearly 17-year hiatus. Like Apple, Microsoft certainly has the means to up its dividend further. If not for a one-time "integration and restructuring" charge of $1.14 billion last quarter, Microsoft's stellar free cash flow (FCF) would have skyrocketed compared to fiscal 2014's Q1 total of $6.97 billion. Even with that significant one-time charge, Microsoft still generated over $7 billion in free cash last quarter.  

Microsoft's cash-generating prowess was responsible for its already impressive balance sheet getting even stronger. Compared to the prior quarter, Microsoft added nearly $3.5 billion in cash and equivalents, and is now sitting on a whopping $89.12 billion; and that's just domestically. As of a quarter ago, Microsoft had nearly $93 billion in cash and equivalents overseas.

With all that cash, Microsoft's recent dividend increase seems rather lame. To put it into perspective, Microsoft has about 8.25 billion shares outstanding, meaning the $0.03 dividend hike equates to an additional payout to shareholders of approximately $247.47 million. In other words, a mere drop in the bucket considering Microsoft's cash position, both here and abroad.

Foolish thoughts
Unlike Apple, Microsoft shareholders didn't have to scream for a dividend. Of course, until the past year, investors didn't have much to hang their respective hats on other than Microsoft's solid dividend yield. Shareholders of Apple, and even Google until this year had enjoyed years of stock price appreciation. Microsoft shareholders? Not so much.

Nadella and team have clearly been working to differentiate Microsoft, not only from the company it was even a year or two ago, but from competitors like Apple and Google. Giving even more back to shareholders in the form of a higher quarterly dividend isn't something you're likely to see from Apple, based on the scratching and clawing it took to open its coffers in the first place. And it seems prying even the slightest of dividends from Google's greedy hands isn't going to happen. But Microsoft has another chance -- and the financial wherewithal -- to differentiate itself to investors even further. What do you say, Nadella?