The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves discusses topics across the investing world.
Over the next several weeks we'll be looking at each of the components of the Dow Jones Industrial Average, and we'll be subjecting them to a dividend checkup. Today, we're looking at Microsoft. Microsoft is a huge, iconic company with a market cap of $258 billion. The company is not often thought of as a dividend stock, though it should be. It's actually grown its dividend at around 14% per year over the past five years, and it has a relatively low payout ratio. Its yield of 2.60% compares very favorably with the average of 3% or so for the Dow. Tech competitors Intel and Apple deliver yields of 3.3% and 1.8%, respectively. Google, of course, does not pay a dividend at all.
Microsoft has been in the news a lot lately for its Surface tablet. John has seen a lot of positive reports about it so far. The company of course faces a lot of competitive threats from the likes of Apple and Google, but it still has an extremely strong and innovative business. The fact that such a strong company delivers a solid and growing dividend might be very attractive for investors.
Among Dow stocks, Microsoft is a very attractive choice for dividends. If you'd like to read about some additional income-generating powerhouses, The Motley Fool has compiled a special free report outlining our top nine dependable, dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here to discover the winners we've picked.
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