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Microsoft increases dividend—will these companies follow?

Tuesday, 17 Sep 2013 | 1:16 PM ET
A jogger runs past signage displayed at the Microsoft Corp. campus in Redmond, Washington.
Mike Fuentes | Bloomberg | Getty Images
A jogger runs past signage displayed at the Microsoft Corp. campus in Redmond, Washington.

Anytime there's a $40 billion transaction being announced, you take notice. That's the case for Microsoft, which set a massive stock buyback program along with a dividend increase on Tuesday, two days ahead of a highly anticipated investor meeting.

Microsoft is trying to make a pledge to shareholders that it will remain friendly by authorizing a $40 billion stock buyback program, replacing the prior $40 billion stock buyback plan set to expire at the end of this month.

It also boosted its quarterly dividend by 22 percent to 28 cents per share. On Thursday this week, shareholders will learn from Microsoft about its plans to replace Chief Executive Steve Ballmer, who is expected to retire within a year.

Microsoft is not alone, though; there are a host of other companies that could be candidates for dividend increases.

The Nasdaq Dividend Achievers Index looks at US companies that are traded on either the Nasdaq or NYSE and have raised their yearly dividend payments for at least the last 10 years.

Three of the stocks caught our eye.

Microsoft's dividend boost a welcomed sign: Pro
Tuesday, 17 Sep 2013 | 11:01 AM ET
Shares of the tech giant rise after the company announces a $40 billion buyback and more than twenty percent increase in its dividend. Kim Forrest, Fort Pitt Capital Group, and Norman Young, Morningstar, share their thoughts. And CNBC's Dominic Chu takes a look at other companies that could follow in Microsoft's footsteps.

Oil giant Chevron currently has a dividend yield of over 3 percent. It's also fresh off boosting its dividend back in April. Over 9 percent of its assets are cash, and they have significantly more cash than they do debt on their balance sheet.

Coca-Cola is also yielding around 3 percent. Nearly 20 percent of its assets are in cash; it also has a lot of liquid assets as a percentage of debt.

There's also Abbot Labs. It's not yielding as much as the others, but it's got 23 percent of its assets in cash along with relatively low levels of debt.

Those are just three of the companies that have those characteristics. Below are some other names that investors may want to consider.

Ticker Company Price Yield Stock %
Chg. YTD
Sector Cash %
Assets
Cash %
Debt
CVX Chevron 124.57 3.21 15.20% Energy 9.40% 179.70%
MCD McDonald's 98.15 3.14 11.30% Consumer
Discretionary
6.60% 17.10%
PG Procter & Gamble 80.055 3.01 17.90% Consumer
Staples
4.30% 18.90%
KO Coca Cola 38.915 2.88 7.30% Consumer
Staples
19.20% 50.80%
XOM Exxon Mobil 89.06 2.83 2.90% Energy 3.00% 85.70%
PEP Pepsico 81.55 2.78 19.20% Consumer
Staples
8.90% 23.40%
WMT Wal-Mart 75.08 2.5 10.00% Consumer
Staples
3.80% 14.40%
IBM IBM 192.29 1.98 0.40% Technology 9.30% 33.50%
UTX United
Technologies
111.08 1.93 35.50% Industrials 5.40% 20.90%
ABT Abbott
Laboratories
34.863 1.61 11.20% Health Care 22.60% 74.10%
Source: CNBC Analytics


—BY CNBC's Dominic Chu and Giovanny Moreano. Follow them on Twitter on @TheDomino and @GiovannyMoreano.

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MSFT
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CVX
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KO
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ABT
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