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Dividend Growth Newsletter holding Microsoft (NASDAQ:MSFT) hiked its quarterly dividend Tuesday afternoon. The firm will pay out $0.23 per share, 15% higher than its previous dividend of $0.20 and now an annual yield of nearly 3% at current levels. The growth was slightly higher than we expected, but we still think the payout is incredibly safe and continues to have room to expand. We plan to update our dividend report on the software giant shortly. For an in-depth evaluation of Microsoft's intrinsic value based on an extensive DCF process, please click here.

Microsoft also flexed some of its patent muscle, inking a licensing deal with beleaguered phone manufacturer Research In Motion (RIMM). The patent allows RIM to use the Extended File Allocation Table (exFAT) for some BlackBerry devices. In less technical terms, the patent relates to technology for retrieving large audiovisual files from flash storage devices. The firm is engaged in deliberations for patent violations with Motorola Mobility and has shown a willingness to monetize its intellectual portfolio. We don't think this will materially add to revenue, but we're always fans of low-cost revenue streams. For an in-depth evaluation of Google's (NASDAQ:GOOG) intrinsic value based on an extensive DCF process, please click here.

In addition to inking a patent deal, Microsoft unveiled pricing for Office 2013. As we've mentioned previously, Office is a cash cow for the company, and the new iteration looks to capitalize on a subscription model. The firm will offer a home version, with use available on five devices, for $100 annually, and it will no longer offer discounts on multiple licenses for any version of Office (student, business, and professional). The cost of single Home and Student licenses will now be $140, a 17% increase over Office 2010. Under this new pricing regime, we think the firm will be able to substantially increase the revenue generated over the lifetime of Office 2013. Plus, the software will work on certain smartphones and tablets, making the integrated offering extremely attractive to enterprises and individuals looking to boost productivity.

Some leadership changes were also announced, as board member and Merck (NYSE:MRK) CEO Raymond Gilmartin will retire from the board of the directors. Though Gilmartin has been a member of the board for 11 years, we do not view the move as material to the company's fortunes. In other news, the firm hired CBS (NYSE:CBS) executive Nancy Tellem. Tellem was formerly the head of CBS Network Television Entertainment Group, and she will be in charge of leading a newly created production studio in Los Angeles that will develop original content for Microsoft's entertainment department, namely Xbox LIVE. Considering the incredibly popular shows during her tenure -- including "Everybody Loves Raymond," various "CSIs," and "Survivor," as well as the fact she's a member of the Broadcasting & Cable Hall of Fame -- we think Tellem has an eye for potential hits and should be given freedom to create unique content for Xbox. We're not sure what's in store for the studio, but we're confident it will help add value to the Xbox LIVE network.

Internationally, the European Union is bringing an antitrust complaint against the tech giant for allegedly not giving 10% of users browser options on service updates. Antitrust legislation is nothing new for Microsoft, as it faced serious legal costs and fines in the United States around the turn of the century and has faced several billions of dollars in fines from the EU over the past few years. Given the proliferation of mobile computing, we're a bit confused at the timing of the complaint, but we doubt it will materially impact the firm's earnings. It's a difficult claim to take seriously given the increased technological awareness of the average person, and the easy accessibility of competing browsers.

Overall, we still fundamentally like Microsoft going into the much anticipated Windows 8 release. With an annual dividend yield of nearly 3%, a substantial cash hoard, and several upside catalysts, we think the firm is an extremely attractive investment. We hold shares in the portfolio of our Dividend Growth Newsletter (please see links on our left sidebar for more info), and we will look to add to our position on any material pullback.

Disclosure: MSFT is included in our Dividend Growth portfolio. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Microsoft Hikes Dividend, Signs Deal With Research In Motion, And More