When discussing the power of stock market investing, one of the most compelling examples often cited is the incredible growth of Microsoft since its IPO in 1986. A $1,000 investment in the tech giant back then could be worth as much as $6 million today, thanks to multiple stock splits. In addition, investors holding enough shares could earn roughly $1,000 a month just from Microsoft’s dividends.
Understanding Dividend Payouts
A recent analysis by Benzinga in March 2024 delved into how much investors could potentially earn from Microsoft’s dividend payouts. The company currently pays $0.75 per share quarterly, which equates to an annual dividend of $3 per share.
At the time of the Benzinga analysis, Microsoft’s stock price stood at $409.14 per share. By January 2025, that price had risen to around $440. Based on the earlier price of $409.14, the dividend yield was calculated at 0.72%.
How Much Do You Need to Earn $1,000 a Month in Dividends?
For an investor aiming to earn $1,000 a month, or $12,000 annually, from Microsoft dividends, the required investment would be approximately $1.64 million. This assumes a stock price of $409.14, and would mean holding around 4,018 shares of Microsoft stock.
Benzinga provided a formula to calculate the necessary investment:
Desired annual income ($12,000) ÷ Dividend yield (0.0073) = Investment amount ($1,643,836).
The Cost of Earning Through Dividends
The analysis from Benzinga shows that to generate $1,000 a month in dividends from Microsoft, an investor would need to have a sizable amount of capital invested. In this case, over $1.6 million would be required to earn such returns through dividends alone.
This reinforces the age-old adage: it takes money to make money. While the potential for substantial returns exists in stocks like Microsoft, reaching the level of income that yields $1,000 per month in dividends is no small feat and requires a hefty investment.
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