These Two Tech Giants Are Up More Than 400% And Continue To Print Money For Dividend Growth Investors: Apple (AAPL) and Microsoft (MSFT)

I’ve been a loyal dividend growth investor for more than 10 years. It’s an investment strategy that has treated me incredibly well.

So well, in fact, following this strategy allowed me to build a six-figure portfolio in only a few years and even retire in my early 30s. But as nearly foolproof as this strategy is, it still gets its fair share of critics.

Even when a lot of these critics are flat out wrong. One misnomer about the strategy is that high-quality dividend growth stocks don’t grow. Well, that’s an odd thing to think.

The “growth” in dividend growth investing is… umm… growth. In fact, many high-quality dividend growth stocks are growing faster than the average stock and vastly outperforming the market.

And I can think of two tech giants as prime examples. Today, I want to tell you about two tech dividend growth stocks that continue to print money for dividend growth investors. Ready? Let’s dig in.

The first tech dividend growth stock that is printing money for dividend growth investors is Apple (AAPL).

Apple is a multinational tech company with a market cap of $2.4 trillion.

I know. No secret here. We’ve all heard Apple, right? Everyone you know is using one of their products. Likely an iPhone or iPad. Maybe AirPods. Or maybe an Apple Watch. Or, well, on and on it goes.

But that’s exactly my point. Their products are everywhere.

The reason Apple is such an amazing company to invest in, is because its products and services are ubiquitous at this point. It’s as dominant as a tech company can get.

Apple may as well be renamed the US Treasury, because it is practically printing money right now.

Check this out. Despite its massive size, it’s still growing at an incredible rate. They just reported third quarter results on July 27. And get this. Revenue grew by 36.4% YOY. They did over $80 billion in revenue. In a single quarter. That’s more revenue than a lot of S&P 500 companies bring in over an entire year. EPS of $1.30 beat consensus expectations by a full $0.29 and grew by 100% YOY. A $2.4 trillion company growing sales and profit at this rate? It’s almost unheard of.

And you know what growing profit means? A growing dividend.

Indeed, Apple has increased its dividend for nine consecutive years. While the starting yield of 0.6% is small, it’s those dividend raises that slowly add up year after year as the business grows and the stock rises in value. The five-year dividend growth rate is 9.4%. And with the dividend payout ratio at only 17.2%, I suspect we’re in for plenty more large dividend increases in the years to come. Keep in mind, Apple has almost $100 billion in cash. That gives further cushion to the dividend payout.

Every time I bring up Apple in a video, I hear that it’s overvalued. Well, those investors complaining about valuation are missing out.

I called Apple a “must-own stock” for serious dividend growth investors in March, when the stock was around $135/share. A lot of viewers complained about valuation and low yield. Yet the stock is now at $145/share.

This is a stock that’s up more than 450% over the last five years! And with the ubiquity of their products and services, their incredible growth rate, the printing of money, and their near-$20 billion per quarter stock repurchase program, the stock is likely headed a lot higher, despite the lofty P/E ratio of 28.4. Apple is repurchasing so much stock, that there’s just not much left for the rest of us. So if you don’t have Apple in your dividend growth stock portfolio yet, you may want to strongly consider changing that.

The other tech giant that continues to print money for dividend growth investors is Microsoft (MSFT).

Microsoft is a global technology company with a market cap of $2.2 trillion.

A trillion here. A trillion there. Soon enough, you’re working with big money. Seriously, though, the big size might lull you into a false sense of complacency, thinking they can’t grow anymore.

But you’d be wrong. Very wrong.

From Windows to Xbox to Office to LinkedIn to Azure, Windows is firing on all cylinders. Actually, they need an extra cylinder. Because Microsoft is operating at a level that puts them in extremely rare company.

This is no sleeping giant. Their growth is off the charts.

How off the charts? Well, they reported FY 2021 Q4 results on July 27. Revenue increased by 21.5% YOY. They’re now producing more than $45 billion in revenue in a single quarter. Just massive scale here. EPS came in at $2.17, which shows 49% YOY growth. If every company in my portfolio was growing at a 49% YOY clip, I’d be an extremely happy investor. Azure cloud was a standout, showing 51% YOY revenue growth. There’s no slowdown here.

No slowdown in the business, which means no slowdown in the dividend.

Microsoft has increased its dividend for 19 consecutive years, and they’re really still getting warmed up. The stock’s yield, at 0.8%, is, again, low. You’re not going to get a 6% yield when a company is growing like this. It doesn’t work like that. But the flip side is the growth. The 10-year dividend growth rate is 13.6%. And with a payout ratio of just 30.5%, the dividend is easily covered. Plus, there’s the fact that Microsoft is one of only two companies with a AAA credit rating from Standard & Poor’s – a higher credit rating than the US government, which literally does print money. This dividend is only going in one direction – up.

You know what else is going up? The stock.

Microsoft stock has shot up more than 400% over the last five years. And of course it has, with this kind of growth. I highlighted Microsoft as an undervalued dividend growth stock back in April, when the stock was around $250/share. Again, viewers left comments left and right, grumbling about valuation. Yet here we are, with the stock bumping up against $290/share. And you already know which direction this thing is headed in – just look at a five-year or ten-year chart. If you haven’t already jumped on this money train, I would urge you to seriously reconsider that. Choo-choo. All aboard.

— Jason Fieber

P.S. If you’d like access to my entire six-figure dividend growth stock portfolio, as well as stock trades I make with my own money, I’ve made all of that available exclusively through Patreon.

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