September is my favorite month. It’s a time for football, the start of fall, and my birthday. It’s also when companies announce dividend increases for the next year.

It’s been a busy week on that front, as three big tech companies have announced new dividend payouts.

Microsoft Remains Mr. Dependable

Microsoft Corp. (MSFT) announced a 9.6% dividend increase on September 15. This marks the 24th consecutive year that the company has raised its dividend, and the increase is similar to the 10.4% average growth of the dividend over the last decade.

I’ve owned Microsoft in the “DGI For the DIY” portfolio since it was created in 2013. I track dividend increase announcements as part of my portfolio research, which are all listed on the “DivInc” tab of the embedded Google Doc on my portfolio page.

Here are Microsoft’s annual dividend increases since 2013.

Dividend increases have been between 9.5% and 10.5% for the last 8 years, so it appears management is comfortable maintaining that growth rate. The double-digit growth is impressive, but that’s lagged earnings growth by about 8% annually, resulting in the dividend payout ratio dropping from around 46% in 2017 to around 23% of expected earnings in 2025.

My hunch is that ~10% annual dividend growth will continue in the coming years while earnings growth stays higher in the mid-teens. With a AAA credit rating and fortress balance sheet, Microsoft remains one of the easiest long-term holds of the mega-tech stocks.

T-Mobile Becoming A Dividend Growth Machine

T-Mobile USA (TMUS) is a new kid on the block in the dividend world, but unlike the cell phone dinosaurs AT&T (T) and Verizon (VZ), it provides growth rather than income for a portfolio.

T-Mobile first initiated a dividend in 2023, raised the dividend by 35.4% in 2024, and followed that up with a 15.9% increase earlier this week. Both increases were roughly in line with earnings growth, so it appears management is comfortable with a payout ratio of around 35%.

In addition to the dividend growth, the company has also been aggressively buying back shares. T-Mobile has lowered its share count from 1.2554 billion shares at the end of 2022 to 1.1348 billion shares at the end of Q1 2025, a reduction of 9.7%.

With earnings projected to grow by 12% in 2025 and 19% in each of the next two years, this company remains one of my favorite buys at current prices. It appears attractively valued with a 22 PE and 1.7% yield.

Texas Instruments: Dividend Increase Despite High Payout Ratio

The third tech stock to announce a dividend increase this week was Texas Instruments (TXN), which announced a 4.4% increase on September 18. While this was the smallest increase of the three, it was the most surprising one to me.

Texas Instruments has a long history of dividend growth and being a proponent of returning cash to shareholders. The company now has a 22-year streak of increasing dividends and has a stated goal of returning 100% of free cash flow to shareholders.

However, its earnings have dropped by 25% and 26% in each of the last two years, resulting in the payout ratio ballooning to over 100% of earnings. I expected the company to announce a token increase of a penny per share for the next few years in an attempt to get the payout ratio back down to its more typical 50-60% range.

The six-cent (4.4%) increase isn’t much on the surface, but the message it sends to shareholders is important. It is proof-positive that the company has every intention of sticking with the return of 100% of free cash-flow back to its owners.

Dividends are an afterthought to many tech companies, so seeing Texas Instruments emphasize them is encouraging. Earnings are projected to rebound by 8% in 2025 and then by 17% in both 2026 and 2027, which bodes well for continued dividend growth.

The stock is expensive at 32X 2025 estimates, so I won’t be adding to my position off this announcement. However, it is an encouraging increase, and it helps convince me to remain a long-term holder of the stock.

Summary

Q3 is ending on a positive note, with these three tech companies coming through with solid dividend increases for shareholders.

Microsoft continues performing as the blue-chip of the Magnificent Seven, pumping out yet another increase of nearly ten percent.

T-Mobile followed up last year’s 34% increase with another solid boost of 16%. With strong earnings, it appears poised to continue with double-digit increases going forward.

Finally, Texas Instruments backed up its words with actions, growing the dividend by over 4% despite negative earnings growth.

Three different stories, but all companies that I’m comfortable holding for the long-term in my portfolio.