1 "Magnificent Seven" Stock You'll Regret Not Buying During the Dip

The cloud services industry is still relatively young and has much more room to expand as companies shift more of their operations to the cloud. As this happens, Azure should continue to drive a lot of Microsoft’s growth.

Through decades of expanding into different industries, Microsoft built the most thorough ecosystem in the big tech world. It has consumer and enterprise electronics, consumer and enterprise software, cloud services, social media, and gaming.

When the economy hits a rough patch, you want to invest in businesses that can generate consistent and recurring revenue, and Microsoft has that. Maybe more important, though, is the number of enterprise and corporate clients Microsoft has.

Corporations are less likely to cut spending on vital software or electronics than your everyday consumer, who may be pressed for cash. This can help keep Microsoft’s financials consistent, even when there’s a pullback on spending. That doesn’t mean Microsoft won’t see a slight slowdown, but its revenue is more stable and predictable, especially in the long term.

Rarely do people look at Microsoft and think about its dividend, but it has been paying one since 2003. Microsoft’s stock price has shot up since then, so its dividend yield is generally low, but the company has shown it’s committed to making the dividend a selling point to investors.

Microsoft has increased its annual dividend for 23 consecutive years and increased it by over 160% in just the past decade.

With a yield below 1%, Microsoft’s dividend isn’t mind-blowing. Still, it can have a real impact on total returns in the long run. In the past decade, Microsoft’s stock price increased around 810%, and its total returns are around 960% (as of April 16). That’s a noticeable difference.

Couple a dividend with Microsoft stock’s growth potential, and you have a true two-for-one benefit for investors.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Stefon Walters has positions in Apple and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

1 “Magnificent Seven” Stock You’ll Regret Not Buying During the Dip was originally published by The Motley Fool