Tech company Salesforce (NYSE:CRM) announced last week that it would be increasing its quarterly dividend. The new quarterly dividend of $0.416 is a 4% increase from the $0.40 which it was paying previously. This means Salesforce will be paying its shareholders approximately $1.67 per share over the course of a full year, which is a yield of 0.62% based on Friday’s closing price of $269.97.
That’s not a terribly high payout given that the S&P 500 average yield is 1.3%, but it’s comparable to the yield which investors can get from other tech stocks. And if you’re looking for a mix of dividends and growth, it could help make Salesforce a more compelling investment option for the long term.
Salesforce initiated its first ever dividend last year so this increase is also its first bump up to its payout. More tech companies have begun offering dividends but whether they’ll end up being solid dividend growth stocks is still questionable, as they’ll have to balance both their growth prospects while also paying and increasing their payouts.
Currently, Salesforce has a payout ratio of around 25%, which suggests that the business still has plenty of room to provide a higher dividend should it want to.
This can be an attractive growth and dividend stock to own as Salesforce has been investing into artificial intelligence and that can unlock significant potential top and bottom line growth in the years to come. Year to date, however, amid the weakness in the markets, the stock is down 19%.