Microsoft has the longest streak of dividend growth — and a two-year head start on runner-up Apple.
Keep in mind that Microsoft and Apple have different preferred methods of rewarding shareholders.
Both have stumbled into dividend payments this century, but only one has restarted them with a vengeance.
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Tech giants have a well-earned reputation for paying stingy dividends. NvidiaDespite being the world’s largest company by market capitalization, it pays a dividend of $0.01 per share, amounting to a yield of just 0.02%. Meta Platforms It only started paying dividends two years ago, or a dozen years after the stock went public, and now offers a 0.32% yield, while AlphabetIts first-ever dividend, announced months after Meta, now pays $0.26%. Tesla and Amazon Shares still pay nothing.
Income isn’t everything, and these stocks could continue to reward shareholders handsomely for years to come, especially considering the historic share repurchase programs many of them have announced, which is another, and generally more tax-efficient, way to return value to shareholders.
Yet since 1960, 85% of the wealth generated by the stock market has come from reinvesting dividends and compounding, according to research by the Hartford Fund. For long-term investors, opportunities from consistent dividend-growers are too powerful to ignore.
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Yet there’s no doubt that these seven companies, known as the Magnificent Seven by analyst Michael Hartnett, have led the high road in this stock market rally fueled by enthusiasm for the $15.7 trillion artificial intelligence (AI) revolution.
The only real candidates are for investors looking for ways to both tap into the historic wave of disruption and collect growing and reliable income. Apple(NASDAQ: AAPL ) and Microsoft(NASDAQ: MSFT ). And one clarifies the other.
Dividend champions, or stocks that have increased payouts at least once for 25 years or more, are battle-tested businesses. Every dividend champion today has seen the 2008-2009 financial crisis, the Covid-19 lockdown, the collapse of the dot-com bubble and Nasdaq CompositeA subsequent 77% crash, and a wave of inflation in 2022 that reached a 41-year high.
Yet despite their dominance and their age (Amazon, Alphabet, Microsoft, and Apple all went public decades ago), no Magnificent Seven stock has ever claimed the title. In exactly 10 years, I predict that will change. Since 2010, Microsoft has been increasing its dividend. After a pause last year, it raised its dividend by 23%, and hasn’t looked back since. Since 2010, it has increased its dividend by 600%, and now pays out $6.6 billion in dividends to shareholders each quarter.
In contrast, Apple resumed paying dividends in 2012 after a 17-year hiatus that began in 1995. In the 14 years since, its payout has grown from $0.10 per share to $0.26 per share today, a 176% increase.
Microsoft’s two-year head start isn’t the only reason to bet on the Seattle-based software giant. Its payout ratio of just 23.6% means it only spends a percentage of its net income to cover its current dividend, making it highly sustainable, especially in light of its 12.5% year-over-year earnings growth last quarter.
This payout ratio is actually higher than Apple’s which argues for Team Cupertino. But in this case, Microsoft’s slightly higher payout ratio is a reflection of management’s preference for rewarding shareholders through earnings rather than share buybacks. After all, Microsoft spent $18.4 billion on share buybacks in the 2025 fiscal year, compared to Apple’s $96.7 billion (and it spent $100.4 billion in the fiscal year before that).
While the Magnificent Seven stocks look invincible right now, 10 years is an era for the market. Adding to the uncertainty is that management has yet to issue dividend guidance.
But there’s another big reason to think Microsoft’s dividend will continue to grow. Its $60 billion share buyback program, which is already partially completed, may still have enough dry powder to retire 100 million shares. That would make Microsoft’s dividend more secure, as the company would save $91 million per quarter in dividends for those retired shares, freeing up cash for future growth.
Today, Microsoft pays a dividend yield of 0.76%, which doesn’t seem great. Despite a 600% increase in dividends since 2010, the yield is low because, as fast as it is growing, Microsoft shares have exploded more than 2,756% over that time frame. With the pace and seriousness with which management increases payouts, this yield could become a force to reckon with over the next decade.
Microsoft is a buy for income investors looking for exposure to the AI revolution and the tech sector more broadly.
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William Dahl has a position at Apple. The Motley Fool has positions on and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. Motley Fool has a disclosure policy.
Prediction: This will be the first dividend champion from “The Magnificent Seven” was originally published by Motley Fool.
