MSFT Capital Return Hits $364 Bil in 10 Years
In the last decade, Microsoft (MSFT) has returned a massive $364 Bil back to its shareholders through cold, hard cash via dividends and buybacks. Let’s look at some numbers and compare how this payout power stacks up against the market’s biggest capital-return machines.
As it turns out, MSFT has returned the 2nd highest amount to shareholders in history.
| MSFT | S&P Median | |
|---|---|---|
| Dividends | $165 Bil | $2.8 Bil |
| Share Repurchase | $199 Bil | $5.2 Bil |
| Total Returned | $364 Bil | $8.8 Bil |
| Total Returned as % of Current Market Cap | 9.6% | 25.8% |
Why should you care? Because dividends and share repurchases represent direct, tangible returns of capital to shareholders. They also signal management’s confidence in the company’s financial health and ability to generate sustainable cash flows. And there are more companies like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.
Top 10 Companies By Total Shareholder Return
| Total Money Returned | As % Of Current Market Cap | via Dividends | via Share Repurchases | |
|---|---|---|---|---|
| AAPL | $835 Bil | 24.2% | $140 Bil | $695 Bil |
| MSFT | $364 Bil | 9.6% | $165 Bil | $199 Bil |
| GOOGL | $343 Bil | 14.0% | $12 Bil | $331 Bil |
| XOM | $207 Bil | 44.1% | $144 Bil | $63 Bil |
| WFC | $206 Bil | 80.9% | $59 Bil | $147 Bil |
| JPM | $168 Bil | 20.5% | $0.0 | $168 Bil |
| META | $167 Bil | 8.8% | $6.4 Bil | $160 Bil |
| ORCL | $163 Bil | 24.7% | $34 Bil | $129 Bil |
| JNJ | $157 Bil | 36.6% | $104 Bil | $52 Bil |
| CVX | $149 Bil | 56.2% | $97 Bil | $53 Bil |
For full ranking, visit Buybacks & Dividends Ranking
What do you notice here? The total capital returned to shareholders as a % of the current market cap appears inversely proportional to growth prospects for reinvestments. Companies like META and MSFT are growing much faster, in a more predictable way, compared to the others, but they have returned a much lower fraction of their market cap to shareholders.
That’s the flip side to high capital returns. Sure, they are attractive, but you have to ask yourself the question: Am I sacrificing growth and sound fundamentals? With that in mind, let’s look at some numbers for MSFT. (see Buy or Sell MSFT Stock for more details)
MSFT Fundamentals
- Revenue Growth: 14.9% LTM and 12.5% last 3-year average.
- Cash Generation: Nearly 25.4% free cash flow margin and 45.6% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for MSFT was 6.9%.
- Valuation: MSFT trades at a P/E multiple of 37.2
- Opportunity vs. S&P: Compared to S&P, you get a higher valuation, higher revenue growth, and better margins
| MSFT | S&P Median | |
|---|---|---|
| Sector | Information Technology | – |
| Industry | Systems Software | – |
| PE Ratio | 37.2 | 23.9 |
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| LTM* Revenue Growth | 14.9% | 5.1% |
| 3Y Average Annual Revenue Growth | 12.5% | 5.2% |
| Min Annual Revenue Growth Last 3Y | 6.9% | -0.3% |
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| LTM* Operating Margin | 45.6% | 18.7% |
| 3Y Average Operating Margin | 44.0% | 17.8% |
| LTM* Free Cash Flow Margin | 25.4% | 13.0% |
*LTM: Last Twelve Months
That’s a good overview, but evaluating a stock from an investment perspective involves much more. That is exactly what Trefis High Quality Portfolio does. It is designed to reduce stock-specific risk while giving upside exposure.
MSFT Historical Risk
Microsoft isn’t immune to big drops either. During the Dot-Com Crash, it fell about 65%, and in the Global Financial Crisis, it lost close to 58%. Even more recent shocks hit hard—Covid pulled it down 28%, the Inflation Shock shaved off 37%, and the 2018 correction still pushed it down around 18%. So yeah, it’s solid overall, but when the market turns, MSFT can still take a serious hit.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.