MSFT vs ROP: Dividend Comparison
Dividend data as of
Microsoft Corp (MSFT) and Roper Technologies Inc (ROP) are both in the Information Technology sector, making them natural rivals for dividend investors. Both stocks offer similar yields — MSFT at 0.84% and ROP at 0.97%. For dividend growth, ROP leads with a 5-year CAGR of 18.2% 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
ROP yields 0.13% more than MSFT. In dollar terms, MSFT pays $3.48/share vs ROP's $3.38/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%).
ROP: Dividend growth is accelerating — the 3-year CAGR of 26.9% exceeds the 5-year rate of 18.2% and the 10-year rate of 15.5%.
Dividend Safety
MSFT: The payout ratio of 21% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 4.6x.
ROP: The payout ratio of 23% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 4.2x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in MSFT vs ROP 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 $321.99 per share, $10,000 buys about 31.1 shares of Roper Technologies Inc (ROP). Each share pays $3.38 per year in dividends, so the position starts out generating roughly $105 per year — about $9 a month.
ROP is the larger income stream from day one: $19 per year more on the same $10,000 invested.
What could $10,000 of MSFT or ROP 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.
Roper Technologies Inc (ROP) has raised its dividend about 18.2% a year over the past five years. If that pace held, the $97 per year that $10,000 generates today at the current 0.97% yield would reach $518 per year by 2036 — a 5.2% yield on the original cost.
On those trailing rates, ROP pays more in 2036: $518 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 ROP's higher yield?
It doesn't, on the trailing numbers. Roper Technologies Inc (ROP) yields more today (0.97% vs 0.84%) and has also grown its dividend at least as fast (18.2% vs 10.3% a year over five years). Unless MSFT accelerates its raises or ROP stumbles, MSFT never closes the income gap — ROP wins on both current income and growth.
Can MSFT and ROP 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).
Roper Technologies Inc (ROP) earns $14.21 per share against $3.38 paid out in dividends — 4.2x coverage (a 23% 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 ROP if earnings weaken.
Which fits an early-retirement income portfolio better, MSFT or ROP?
For income you need right now, Roper Technologies Inc (ROP) leads: $100,000 invested today pays about $81 a month at the current 0.97% yield, versus $70 a month from Microsoft Corp (MSFT) at 0.84%.
ROP also leads on dividend growth (18.2% vs 10.3% a year over five years), so the trailing numbers favor it on both fronts.
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 $243/yr in MSFT vs $570/yr in ROP 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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