Did Microsoft give dividend before?

[luvya]

I thought they were going to give out their first dividend ever at the end of this year, or did they already do that? If not, why is Yahoo! Finance showing 0.32 dividend & yield?

 

[puffff]

microsoft has been paying dividend for quite some time now.

 

[luvya]

Damn it. But the $3 dividend hasn't been paid out yet, right?

 

[gxshockwav]

yeah, they've been doing the dividend for pretty long now. ISn't much though.

 

[DaveSimmons]

Originally posted by: luvya
Damn it. But the $3 dividend hasn't been paid out yet, right?

Google it -- IIRC you have to be the "owner of record" by a date this month (11/16?) and the payout is a little after that.

It's not their first dividend, it's a one-time extra dividend to clean out half of the $60 billion in funds they've been sitting on.

 

[fs5]

if you had a lot of money you could take advantage of this dividend with little risk. Simply by the stock before the hold date of the dividend payout, wait for the dividend payout to pass, sell the stock after. $3 per share is decent.

The risk you run is that if the shares drop below your buy price (minus any profit made from the dividends) you lose money. Otherwise profit++.

 

[arcas]

fs5, I'm afraid dividends don't quite work like that. The company's stock price will decrease by an amount equal to the dividend. Think of it this way: by paying out the dividend, the overall net worth of the company is decreasing by the same amount. Dividends don't conjur money out of thin air.

For instance, to get Microsoft's $3 one-time dividend, you had to be a shareholder as of yesterday. Thus, one would expect Microsoft's share price to decline by $3/share in the days just prior to Wednesday. And that's exactly what happened: Microsoft stock is down roughly $3 from where it was on Friday.

 

[fs5]

Originally posted by: arcas
fs5, I'm afraid dividends don't quite work like that. The company's stock price will decrease by an amount equal to the dividend. Think of it this way: by paying out the dividend, the overall net worth of the company is decreasing by the same amount. Dividends don't conjur money out of thin air.

For instance, to get Microsoft's $3 one-time dividend, you had to be a shareholder as of yesterday. Thus, one would expect Microsoft's share price to decline by $3/share in the days just prior to Wednesday. And that's exactly what happened: Microsoft stock is down roughly $3 from where it was on Friday.

you're right: http://finance.yahoo.com/q/bc?s=MSFT&t=5d
I don't know the dates but you're saying the dividend was paid out on Friday. What day did you have to be a stock owner to get the dividend? I thought this date was prior to the payout date.

 

[arcas]

Not quite. The dividend technically hasn't been paid out yet. That'll happen sometime in December. In order to receive the one-time dividend, you had to own shares of Microsoft when the markets closed on Wednesday (I think. Might have been Tuesday). So, for all intents and purposes, that money is locked away and can't be spent. That is, Microsoft can't use those billions of dollars to acquire another company since they're already allocated to be paid out to shareholders. Hence the drop in share price leading up to the cutoff date.

There are two conflicting schools of thought regarding dividends. On the one hand, there are those investors who believe it's best to sell your shares prior to the dividend cutoff date. Actually, just prior to the decline leading up to the cutoff date. On the other hand, there are those investors who believe that you should hold onto your shares and accept the dividend payout (and the corresponding drop in share price). For the small-time investor, it's probably six of one, half a dozen of the other. Take your pick. But for larger investors with a substantial number of shares (think institutional investors and the like), tax implications might make one method more attractive than the other.

I'm not a financial analyst, though, so perhaps one will step up and elaborate.

 

[Doodoo]

I think it pays out Dec 2nd.