Morgan Stanley (MS): A Dividend Growth Stock With Strong Long-Term Return Potential
Morgan Stanley (MS) has quietly become an attractive choice for investors seeking both growing dividend income and long-term capital appreciation. The financial services giant recently raised its dividend by 15%, continues to repurchase billions of dollars in shares, and is delivering solid growth as it expands its wealth management business.
We think that combination makes Morgan Stanley a compelling dividend growth stock to buy in October and hold for the long term.
One of the biggest reasons to like Morgan Stanley is its commitment to returning capital to shareholders.
The company recently increased its quarterly dividend from $1 to $1.15 per share, a 15% increase that brings its annual payout to $4.60 per share.
That continues an impressive record of dividend growth. Morgan Stanley paid just $1.10 per share annually in 2018 and $2.95 in 2022. Its current annual payout is now more than four times what it was eight years ago.
At a recent share price of around $181, the stock offers a dividend yield of approximately 2.5%. While that isn’t an unusually high starting yield, the pace of dividend growth makes it particularly appealing for investors looking to build income over time.
And dividends are only part of the story.
Morgan Stanley also returns substantial capital to shareholders through stock repurchases. Its combined shareholder yield, which incorporates dividends and buybacks, recently reached approximately 4.8%.
By reducing the number of shares outstanding, these repurchases can increase each remaining shareholder’s ownership stake and support long-term earnings-per-share growth.
The company repurchased $1.5 billion of its own stock during the third quarter of 2026 and has a $20 billion share repurchase authorization in place.
We see that as another important reason to own the stock. Investors benefit not only from regular dividend payments but also from management’s ongoing efforts to return excess capital.
Morgan Stanley’s underlying business is performing well, too.
In its recently reported third quarter, revenue increased 11% year over year to $20.3 billion, while earnings per share grew 8%.
Particularly encouraging was the performance of its wealth management division, which generated $9 billion in revenue, up 10% from a year earlier.
Wealth management now accounts for nearly half of Morgan Stanley’s total revenue, reflecting an important shift in the company’s business.
Historically known primarily as an investment bank, Morgan Stanley has spent years expanding its wealth and investment management operations. These businesses provide additional sources of revenue beyond traditional investment banking activities and can help make the company’s earnings less dependent on dealmaking and capital market conditions.
The company is continuing to invest in that strategy, including a major expansion of its operations in Dallas.
We believe the growing contribution from wealth management strengthens Morgan Stanley’s long-term investment case, particularly for shareholders who prioritize consistent dividend growth.
The stock’s historical performance is another reason to take notice.
According to Morningstar data through October 14, 2026, Morgan Stanley delivered average annual share-price gains of:
- 19.5% over the past year
- 35.4% over the past three years
- 14.5% over the past five years
- 20.4% over the past ten years
- 19% over the past fifteen years
Those are impressive long-term results, especially for a company that also provides shareholders with a growing dividend.
Of course, past performance doesn’t guarantee future returns, and Morgan Stanley remains exposed to economic conditions, financial markets and fluctuations in investment banking activity.
The stock has also experienced meaningful price swings. Its 52-week trading range extends from approximately $153 to $232, illustrating the volatility investors may encounter.
Still, we think the company’s expanding wealth management business, strong earnings performance and shareholder-friendly capital allocation strategy provide a solid foundation for long-term growth.
At around $181 per share, Morgan Stanley offers investors an established financial services business with a growing dividend, an active share repurchase program and a demonstrated ability to generate attractive long-term returns.
We’re recommending Morgan Stanley as a dividend growth stock to buy in October and hold for the long term. Its latest 15% dividend increase, $20 billion buyback authorization and continued expansion in wealth management give us several reasons to expect the company to keep rewarding patient shareholders in the years ahead.
