Based on a report by Janus Henderson World, corporations paid a staggering $1.7 trillion in dividends to their shareholders in 2023. That was a report amount of money funds, 5% above 2022’s whole.
Tons of of corporations helped drive the company sector’s report dividend outlay. Nonetheless, three rose to the highest as the most important payers: Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL), and ExxonMobil (NYSE: XOM). Here is a take a look at what they paid traders final yr and whether or not these main dividend shares can proceed enriching their traders by way of dividends.
Microsoft’s monster dividend
Microsoft paid $20.7 billion in dividends final yr, which was essentially the most of any firm. The know-how titan is routinely one of many high dividend-paying shares. It was the chief in 2020, positioned second in 2021, and was third in 2022. It was in a position to reclaim its spot on the high by rising its dividend (it boosted its dividend per share by 10% in every of the final two years). In the meantime, the chief of the final two years, mining large BHP Group, has paid much less in dividends resulting from decrease commodity costs.
Microsoft can simply afford its large dividend outlay. Over the past six months, Microsoft has produced almost $50 billion in web money circulation from operations whereas paying $10.6 billion in dividends. In the meantime, it ended final yr with $81 billion in money and short-term investments on its steadiness sheet in opposition to $74 billion in debt. That robust monetary profile helps assist its elite AAA credit standing.
The know-how firm can be investing closely in its progress, together with buying gaming firm Activision and growing AI know-how with OpenAI. These and different catalysts ought to allow Microsoft to develop its money circulation, giving it much more cash to pay dividends.
A cash-rich tech titan
Fellow tech large Apple clocked in at No. 2, paying $14.9 billion in dividends final yr. That was barely greater than it paid in 2022, due to dividend will increase. Apple raised its per-share fee by 4.3% final yr, following a 4.5% bump in 2022.
Like Microsoft, Apple can simply afford its big-time payout. The know-how large produced $110.5 billion in money from working actions throughout 2023. It additionally boasts a fortress-like steadiness sheet. Apple ended the yr with a jaw-dropping $162 billion of money, equivalents, and marketable securities in opposition to $111 billion of debt.
That additionally permits the corporate to speculate closely in analysis and growth to launch progressive merchandise that drive income and cash-flow progress. It lately launched its Imaginative and prescient Professional VR headset and is beginning to make investments extra closely in generative AI. These progress drivers ought to allow Apple to supply additional cash that it may use to pay dividends sooner or later.
A cash-gushing oil inventory
ExxonMobil was proper behind Apple at round $14.9 billion in dividend funds final yr. The oil large has steadily elevated its dividend. It raised its fee by 4.1% late final yr, its forty first straight yr of dividend progress. It additionally grew its payout by 3.4% in late 2022.
The power firm produced a prodigious amount of money final yr regardless of decrease oil and fuel costs. Free money circulation really elevated by $1.9 billion final yr to $36.1 billion, due to its concentrate on investing in high-margin capital initiatives. Whereas ExxonMobil returned an industry-leading $32.4 billion in money to shareholders by way of dividends and repurchases, it nonetheless grew its money steadiness to $31.6 billion.
ExxonMobil’s high-return funding technique has it on monitor to double its earnings potential by 2027. On high of that, the corporate agreed to purchase rival Pioneer Pure Sources in a deal value greater than $60 billion, which can additional improve its capability to develop its free money circulation. These and different catalysts ought to give ExxonMobil greater than sufficient gasoline to proceed rising its monster dividend.
Excessive-quality dividend shares
Microsoft, Apple, and ExxonMobil led the world in dividend funds final yr. The huge corporations produce monumental money flows, giving them the cash to put money into rising their companies, pay ever-increasing dividends, and preserve cash-rich steadiness sheets. These options make them ideally suited shares for these searching for very secure and steadily rising dividends.
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Matt DiLallo has positions in Apple and BHP Group. The Motley Idiot has positions in and recommends Apple and Microsoft. The Motley Idiot recommends Pioneer Pure Sources and recommends the next choices: lengthy January 2026 $395 calls on Microsoft and brief January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure policy.
Companies Paid a Record $1.7 Trillion in Dividends Last Year. These 3 Dividend Stocks Led the Way. was initially revealed by The Motley Idiot
