AAPL vs MSFT: Dividend Yield, Growth & Safety Comparison
Apple Inc. (AAPL) and Microsoft Corp (MSFT) are both in the Information Technology sector, making them natural rivals for dividend investors. MSFT edges ahead on yield at 0.84% versus AAPL's 0.38%. For dividend growth, AAPL leads with a 5-year CAGR of 11.8% versus MSFT's 10.3%. Both stocks carry a "Safe" dividend safety rating. MSFT is a Dividend Contender with 20 years of consecutive increases.
Key Metrics Comparison
| Metric | AAPL | MSFT |
|---|
| Dividend Yield | 0.38% | 0.84% |
| Annual Dividend | $1.03 | $3.48 |
| 5-Year CAGR | 11.8% | 10.3% |
| Payout Ratio | 13% | 21% |
| Consecutive Years | 0 | 20 |
| Price | $257.24 | $401.99 |
Yield Comparison
Microsoft Corp (MSFT) currently yields 0.84%, which is very low for the broader market. That's 0.47% more than Apple Inc. (AAPL), which yields 0.38%. In dollar terms, MSFT pays $3.48/share annually versus AAPL's $1.03/share.
Dividend Growth
Over the past five years, AAPL has grown its dividend at a 11.8% CAGR compared to MSFT's 10.3%. AAPL: Dividend growth is accelerating — the 3-year CAGR of 19.6% exceeds the 5-year rate of 11.8% and the 10-year rate of 10.3%. MSFT: Dividend growth has been steady, with a 3-year CAGR of 10.4% and a 5-year CAGR of 10.3% (10-year: 9.8%).
Dividend Safety
AAPL's dividend safety is rated "Safe." The payout ratio of 13% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 7.7x. MSFT's dividend safety is rated "Safe." The payout ratio of 21% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 4.6x. AAPL's payout ratio of 13% is more conservative than MSFT's 21%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in MSFT generates approximately $84/year in dividend income, compared to $38/year from AAPL — a difference of $46/year. At $100,000, that gap widens to $460/year.
Verdict
- Best for income: MSFT
- Best for growth: AAPL
- Best for safety: AAPL
Frequently Asked Questions
Which has a higher dividend yield, AAPL or MSFT?
Microsoft Corp (MSFT) has a higher dividend yield of 0.84% compared to Apple Inc. (AAPL) at 0.38%.
Is AAPL or MSFT a better dividend growth stock?
Apple Inc. has the stronger dividend growth with a 5-year CAGR of 11.8%, compared to Microsoft Corp's 10.3%.
Which is safer for dividend income, AAPL or MSFT?
Apple Inc.'s dividend safety is rated "Safe" while Microsoft Corp is rated "Safe." The payout ratio of 13% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 7.7x. The payout ratio of 21% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 4.6x.
How much income does $10,000 in AAPL vs MSFT generate?
A $10,000 investment in AAPL generates approximately $38/year in dividends, while the same amount in MSFT generates about $84/year.
Is AAPL or MSFT a Dividend Aristocrat?
Microsoft Corp is a Dividend Contender with 20 consecutive years of increases. Apple Inc. does not currently qualify for aristocrat status.
Which has a lower payout ratio, AAPL or MSFT?
Apple Inc. has a lower payout ratio of 13% compared to Microsoft Corp's 21%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
AAPL vs MSFT: which is better for retirement income?
It depends on your priorities. MSFT for current income, AAPL for dividend growth, AAPL for safety. Many retirement investors hold both for diversification.
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