A small yield hides a powerhouse of dependable growth, financial strength, and consistent cash returns.

Microsoft ( MSFT -0.13% ) is not a high-yield dividend stock. Far from it. Indeed, the yield currently sits well below 1%.

But yield alone doesn't define a dividend stock. Staying power, disciplined capital allocation decisions from management, and the ability to keep raising the payout through thick and thin all matter more than a headline percentage.

These are some of the key reasons why Microsoft is my favorite dividend stock . The company blends predictable, recurring revenue with steady earnings growth and a conservative payout ratio. The software giant funds the dividend out of abundant free cash flow , while still pouring massive sums into important growth opportunit

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