Bloomberg's projection of a $0.03 hike to $0.26 takes into account data such as Microsoft's (MSFT) ability to pay and the payout implied in the options market. The current consensus forecast is for the quarterly dividend to be hiked $0.02 to $0.25.
The company needs to balance the need to keep payouts somewhat inline with increases in operating income (so as not to incur tax on cash held overseas), but not so low as to draw the ire of activist investors like ValueAct.
"Microsoft has a target on its back," says analyst Kim Caughey-Forest, adding that any cash-heavy tech company is paying close attention and considering bigger dividends ... no matter where their cash is domiciled. "The activist investor has really come into play in the last 18 months, and not just at Microsoft."
A $0.26 quarterly dividend at Microsoft would work out to an annualized yield of 3.1% based on last night's close. The company typically announces its new dividend policy in September.