MSFT vs QCOM: Dividend Comparison
Dividend data as of
Microsoft Corp (MSFT) and Qualcomm Inc/De (QCOM) are both in the Information Technology sector, making them natural rivals for dividend investors. QCOM offers a significantly higher 2.51% yield compared to MSFT's 0.84%, a gap of 1.67%. For dividend growth, MSFT leads with a 5-year CAGR of 10.3% versus QCOM's 7.0%. MSFT holds the edge in dividend safety with a "Safe" rating. Both are classified as Dividend Contenders.
Verdict
Yield Analysis
QCOM yields 1.67% more than MSFT. In dollar terms, MSFT pays $3.48/share vs QCOM's $3.52/share annually.
Dividend Growth
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%).
QCOM: Dividend growth is slowing — the 3-year CAGR of 5.7% trails the 5-year rate of 7.0% and the 10-year rate of 6.1%.
Dividend Safety
MSFT: The payout ratio of 21% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 4.6x.
QCOM: The payout ratio of 71% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in MSFT vs QCOM today?
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.
At $140.78 per share, $10,000 buys about 71.0 shares of Qualcomm Inc/De (QCOM). Each share pays $3.52 per year in dividends, so the position starts out generating roughly $250 per year — about $21 a month.
QCOM is the larger income stream from day one: $163 per year more on the same $10,000 invested.
What could $10,000 of MSFT or QCOM income look like in 10 years?
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.
Qualcomm Inc/De (QCOM) has raised its dividend about 7.0% a year over the past five years. If that pace held, the $251 per year that $10,000 generates today at the current 2.51% yield would reach $492 per year by 2036 — a 4.9% yield on the original cost.
On those trailing rates, QCOM pays more in 2036: $492 versus $224 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would MSFT's dividend growth overtake QCOM's higher yield?
Not within a realistic holding period. Microsoft Corp (MSFT) is growing its dividend faster (10.3% vs 7.0% a year), but the starting-yield gap — 2.51% for QCOM vs 0.84% for MSFT — is wide enough that the crossover sits more than 30 years out on trailing rates. For income you plan to spend, QCOM's head start is decisive.
Can MSFT and QCOM afford their dividends?
Microsoft Corp (MSFT) earns $15.96 per share against $3.48 paid out in dividends — 4.6x coverage (a 21% payout ratio).
Qualcomm Inc/De (QCOM) earns $4.96 per share against $3.52 paid out in dividends — 1.4x coverage (a 71% payout ratio).
MSFT'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 QCOM if earnings weaken.
Which fits an early-retirement income portfolio better, MSFT or QCOM?
For income you need right now, Qualcomm Inc/De (QCOM) leads: $100,000 invested today pays about $209 a month at the current 2.51% yield, versus $70 a month from Microsoft Corp (MSFT) at 0.84%.
With a decade or more before the income is needed, MSFT's faster dividend growth (10.3% vs 7.0% 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; QCOM has raised its dividend 23 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 $243/yr in MSFT vs $631/yr in QCOM 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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