AAPL vs MSFT: Dividend Comparison
Dividend data as of
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.
Verdict
Yield Analysis
MSFT yields 0.47% more than AAPL. In dollar terms, AAPL pays $1.03/share vs MSFT's $3.48/share annually.
Dividend Growth
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: The payout ratio of 13% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 7.7x.
MSFT: The payout ratio of 21% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 4.6x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in AAPL vs MSFT today?
At $257.24 per share, $10,000 buys about 38.9 shares of Apple Inc. (AAPL). Each share pays $1.03 per year in dividends, so the position starts out generating roughly $40 per year — about $3 a month.
At $401.99 per share, $10,000 buys about 24.9 shares of Microsoft Corp (MSFT). Each share pays $3.48 per year in dividends, so the position starts out generating roughly $87 per year — about $7 a month.
MSFT is the larger income stream from day one: $47 per year more on the same $10,000 invested.
What could $10,000 of AAPL or MSFT income look like in 10 years?
Apple Inc. (AAPL) has raised its dividend about 11.8% a year over the past five years. If that pace held, the $38 per year that $10,000 generates today at the current 0.38% yield would reach $115 per year by 2036 — a 1.1% yield on the original cost.
Microsoft Corp (MSFT) has raised its dividend about 10.3% a year over the past five years. If that pace held, the $84 per year that $10,000 generates today at the current 0.84% yield would reach $224 per year by 2036 — a 2.2% yield on the original cost.
On those trailing rates, MSFT pays more in 2036: $224 versus $115 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would AAPL's dividend growth overtake MSFT's higher yield?
Not within a realistic holding period. Apple Inc. (AAPL) is growing its dividend faster (11.8% vs 10.3% a year), but the starting-yield gap — 0.84% for MSFT vs 0.38% for AAPL — is wide enough that the crossover sits more than 30 years out on trailing rates. For income you plan to spend, MSFT's head start is decisive.
Can AAPL and MSFT afford their dividends?
Apple Inc. (AAPL) earns $7.91 per share against $1.03 paid out in dividends — 7.7x coverage (a 13% payout ratio).
Microsoft Corp (MSFT) earns $15.96 per share against $3.48 paid out in dividends — 4.6x coverage (a 21% payout ratio).
AAPL's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for MSFT if earnings weaken.
Which fits an early-retirement income portfolio better, AAPL or MSFT?
For income you need right now, Microsoft Corp (MSFT) leads: $100,000 invested today pays about $70 a month at the current 0.84% yield, versus $31 a month from Apple Inc. (AAPL) at 0.38%.
With a decade or more before the income is needed, AAPL's faster dividend growth (11.8% vs 10.3% a year) matters more than the starting yield — raises compound into the larger paycheck over time.
On consistency: MSFT has raised its dividend 20 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $119/yr in AAPL vs $243/yr in MSFT by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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