Microsoft Stock History: Microsoft – To Buy or Not to Buy?

Page 1 of 2

Microsoft Corporation (NASDAQ:MSFT)Microsoft Stock History: On one side of things, Microsoft Corporation (NASDAQ:MSFT) is a stock that many people want to own because of its stability. On the other side of things, investors often times ask themselves why they are buying shares of the company.

Although it has yet to happen, people are on the edge of their seat wondering when Microsoft Corporation will release the “next big thing” which allows it to break out from the shadows and prove its prominence once again.

Jeff Reeves of MarketWatch recently took a closer look at this phenomenon in his piece entitled: Microsoft: Nothing to offer beyond the Dividend

He starts off by noting the following:

“To be clear, I’m not one of those post-PC bears who thinks Microsoft is doomed. I believe Microsoft will be around for many years to come.”

As you can see, he shares the same sentiment as many. It is not that Microsoft Corporation (NASDAQ:MSFT) is doomed for failure at some point in the near future. that being said, it is hard to imagine a situation in which the stock is going to take off and offer better returns.

For those who are unfamiliar with the way things usually work with Microsoft Corporation (NASDAQ:MSFT) stock, Reeves does a great job by offering the following rundown:

“Valuation: The valuation is more than fair, with a price-to-earnings ratio of 9.7 according to Standard & Poor’s fiscal 2013 forecasts of $2.88 in EPS. Use full-year 2014 forecasts of $3.11, and you get close to 9.0.”

“Cash: Microsoft has $66 billion in cash — enough to buy both Hewlett-Packard (HPQ) and Dell (DELL) combined. Even though almost $58 billion of that is overseas and could be subject to taxes if repatriated, that’s a huge chunk of change.”

“Windows Isn’t Dead: Windows and Office remain dominant and profitable. While tablets are ascendant, desktops and laptops will remain necessary to the workplace in some form for many years.”

“Sleepy But Profitable Products: While Bing or the Windows Phone or Surface lack the dominance of Windows, that doesn’t mean they are failures. Sure, they may never have a cult following, but that doesn’t mean they don’t make money.”

“Dividend: Microsoft has more than doubled its dividend in the last five years to 92 cents annually — a roughly 3.3% yield — and the payout ratio is a very sustainable 31% in fiscal 2013 that could signal further continued increases in years ahead.”

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!