In the video below, the Motley Fool's senior technology analyst, Eric Bleeker, looks at the prospects for Microsoft's (NASDAQ:MSFT) dividend in 2013.
Microsoft is no rookie when it comes to paying back shareholders, but the company has been bad about going about it, Eric says.
In the past, Microsoft has bought back a lot of its own stock. In 2010, it repurchased $11.3 billion in its own shares. But it has bought back stock aggressively when it was selling at higher prices, leaving investors with little to show for the buybacks.
But more recently, Microsoft has instead shifted to paying bigger dividends. Microsoft pays out only 24% of the cash it brings in, so the dividend -- now at about 3.5% -- has room to grow. Eric sees another 25% increase in the dividend, with increases continuing in years to come.