Microsoft (MSFT) recently reported earnings for their fiscal year end June 30th and the report highlights the capability they have to grow into a significant dividend payer. The measure that is most astonishing in our mind was reported free cash flow – this figure exceeded $24.7 billion for the year. To put this number into perspective, it means 74.6% of all the companies in the S&P500 have a smaller total market value than the free cash flow just generated by MSFT over the last 12 months! With less than $12 billion in long term borrowings and total cash on the balance sheet of approximately $53 billion, the opportunity to continue to pay investors a higher cash dividend is clearly present. Their current dividend commitment to investors is under $6 billion per year – this can and should increase. We’ll be watching.