MSFT vs QCOM: Dividend Yield, Growth & Safety Comparison
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.
Key Metrics Comparison
| Metric | MSFT | QCOM |
|---|
| Dividend Yield | 0.84% | 2.51% |
| Annual Dividend | $3.48 | $3.52 |
| 5-Year CAGR | 10.3% | 7.0% |
| Payout Ratio | 21% | 71% |
| Consecutive Years | 20 | 23 |
| Price | $401.99 | $140.78 |
Yield Comparison
Qualcomm Inc/De (QCOM) currently yields 2.51%, which is solid for the broader market. That's 1.67% more than Microsoft Corp (MSFT), which yields 0.84%. In dollar terms, QCOM pays $3.52/share annually versus MSFT's $3.48/share.
Dividend Growth
Over the past five years, MSFT has grown its dividend at a 10.3% CAGR compared to QCOM's 7.0%. 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'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. QCOM's dividend safety is rated "Moderate." 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. MSFT's payout ratio of 21% is more conservative than QCOM's 71%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in QCOM generates approximately $251/year in dividend income, compared to $84/year from MSFT — a difference of $167/year. At $100,000, that gap widens to $1670/year.
Verdict
- Best for income: QCOM
- Best for growth: MSFT
- Best for safety: MSFT
Frequently Asked Questions
Which has a higher dividend yield, MSFT or QCOM?
Qualcomm Inc/De (QCOM) has a higher dividend yield of 2.51% compared to Microsoft Corp (MSFT) at 0.84%.
Is MSFT or QCOM a better dividend growth stock?
Microsoft Corp has the stronger dividend growth with a 5-year CAGR of 10.3%, compared to Qualcomm Inc/De's 7.0%.
Which is safer for dividend income, MSFT or QCOM?
Microsoft Corp's dividend safety is rated "Safe" while Qualcomm Inc/De is rated "Moderate." The payout ratio of 21% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 4.6x. 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.
How much income does $10,000 in MSFT vs QCOM generate?
A $10,000 investment in MSFT generates approximately $84/year in dividends, while the same amount in QCOM generates about $251/year.
Is MSFT or QCOM a Dividend Aristocrat?
Microsoft Corp is a Dividend Contender (20 years) and Qualcomm Inc/De is a Dividend Contender (23 years).
Which has a lower payout ratio, MSFT or QCOM?
Microsoft Corp has a lower payout ratio of 21% compared to Qualcomm Inc/De's 71%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
MSFT vs QCOM: which is better for retirement income?
It depends on your priorities. QCOM for current income, MSFT for dividend growth, MSFT for safety. Many retirement investors hold both for diversification.
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