Under the terms of the NetSuite Inc (NYSE:N) partnership, Oracle is planning to combine its human capital management software, which allows enterprises to organize, pay and staff their workforce, with NetSuite Inc (NYSE:N)’s enterprise resource planning software, which businesses use to integrate internal and external management of information between the company and its stakeholders. The two companies anticipate that these combined applications will be available by the end of this year.
Oracle Corporation (NASDAQ:ORCL)’s partnership with Microsoft Corporation (NASDAQ:MSFT) focuses primarily on its Java-owned software, which it will allow Microsoft to use to leverage its existing cloud-based services with Oracle’s existing software tools. It’s a bit early to see how this partnership might work out, but on brand name alone, it’s intriguing.
Show me the money, Oracle
Overall, fiscal 2013 wasn’t nearly the disaster that investors have made it out to be. Cloud-software subscriptions and licensing grew 4% to $10.3 billion, while application software and licensing grew 6% to $17.2 billion. More importantly, Oracle Corporation (NASDAQ:ORCL) delivered a record non-GAAP operating margin of 47%, which translated into $14 billion in operating cash flow, of which more than 90% was returned to shareholders. With a cash balance in excess of $32 billion, this means two things to long-term investors: share buybacks and dividends!
In Oracle’s fourth-quarter press release, it announced that its board of directors had authorized the purchase of up to $12 billion worth of its own shares. Even though share buybacks don’t put money directly into shareholders’ pockets, they do reduce the number of shares outstanding, making the company appear cheaper on a P/E basis. Based on Oracle Corporation (NASDAQ:ORCL)’s Friday closing value, the company could repurchase around 390 million, or 8.3%, of its outstanding shares.
The other big boost comes in the form of a doubling of its dividend from $0.06 per quarter to $0.12. The new yield pushes Oracle well beyond the 1% mark to a payout of 1.6%. Also, despite doubling its dividend, Oracle Corporation (NASDAQ:ORCL) is still scheduled to pay out only 17% of its projected 2014 EPS, leaving the company plenty of room to boost its dividend down the road without taking away precious cash flow needed to boost its cloud R&D.
Oracle clearly has some challenges to face with regard to investing in its cloud-computing software, but it’s made serious inroads over the past week with three potentially lucrative partnerships. With slow-but-steady application software growth, billions in operating cash flow, a hefty $32 billion in cash, and a doubling of its dividend, Oracle Corporation (NASDAQ:ORCL) is establishing itself as a premier name for income investors to consider moving forward.
The article 1 Great Dividend You Can Buy Right Now originally appeared on Fool.com.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of Microsoft Corporation (NASDAQ:MSFT) and Oracle Corporation (NASDAQ:ORCL), and recommends NetSuite Inc (NYSE:N) and salesforce.com, inc. (NYSE:CRM).
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