Microsoft (MSFT:NSD) has managed to achieve stronger financial performance despite the difficulties faced by the technology sector this year. This is due, in part, to the company’s lengthy history of dividend payments and sustained growth, which makes it an essential component to any investment portfolio.
Microsoft continues to engage in growth-oriented initiatives, such as its recent partnership with chipmaker NVIDIA Corporation. The cooperation intends to create a powerful computer capable of cloud-based artificial intelligence computing.
In addition to its expansion goals, Microsoft constantly pays dividends to its shareholders. The firm has recently declared a $0.68 per share quarterly dividend, due on March 9, 2023. With a $2.72 yearly dividend, the stock currently yields 1.13 percent.
Microsoft’s dividend payouts have increased at a compound annual growth rate (CAGR) of 10.4% over the past three years and 9.9% over the past five years. Additionally, the corporation has grown its dividends for eighteen straight years.
In addition, analysts anticipate a 13% yearly increase in Microsoft’s profits per share (EPS) during the next five years. Despite a 6.4% fall in the stock over the past six months, it has closed at $241.01 per share a month and five days ago, a slight gain. Moreover, it is trading over its 50-day moving average of $240.80.
Microsoft’s lengthy history of dividend payments, stable growth, and strategic investments make it a great long-term investment option. Despite difficulties in the technology industry, Microsoft has shown to be a dependable and rewarding investment option for investors
What Factors Make Microsoft an Attractive Investment?
Despite adverse macroeconomic conditions in the technology industry, Microsoft (MSFT) generated remarkable financial results. The company’s great performance is fueled by its constant growth and lengthy history of dividend payments, making it an essential investment for any portfolio.
Robust Financials:
MSFT’s good financial position is one of the primary contributors to its impressive performance. The company’s first fiscal quarter ended on September 30 with a 10.6% increase in total revenue, a 9.5% increase in gross margin, and a 6.3% gain in operating income compared to the same period last year. In addition, the company’s net income and earnings per share amounted to $17.56 billion and $2.35, respectively.
Profitability:
MSFT’s high profitability is another crucial aspect. The company’s trailing twelve-month EBIT margin and net income margin are 529.6% and 958.8% above the industry averages, respectively. In addition, the stock’s 12-month trailing ROCE, ROTC, and ROTA are 757.1%, 577.9%, and 1,176.5% greater than the industry norms, respectively.
Strong History of Growth:
In addition, Microsoft has a solid growth history, with sales increasing at a CAGR of 16.1% over the past three years and 15.4% over the past five years. EBIT and net income grew at CAGRs of 22.8% and 19.3% over the past three years, while EPS expanded at a CAGR of 20.6% over the same time frame.
Positive Analyst Opinions:
The good opinion on Wall Street regarding the company is also a beneficial aspect. In the past three months, 27 Wall Street analysts have rated MSFT, with 25 recommending a Buy and two recommending a Hold. The median 12-month price target of $291.34 indicates a potential upside of 20.9%.
Excellent POWR Ratings:
MSFT’s POWR Ratings reflect its excellent fundamentals. The stock has an overall rating of B, which in the company’s rating system corresponds to a Buy recommendation. The POWR Ratings are determined by analyzing 118 distinct factors, with optimal weighting applied to each. MSFT receives a B for Sentiment and Quality, consistent with analyst ratings positive sentiment and above-average profitability. It earns a B rating for Stability, consistent with its five-year beta of 0.93.
The Takeaway:
In conclusion, Microsoft is a dependable option for investors seeking a long-term portfolio enhancement. Consistent financial performance, targeted expansion ambitions, and a history of continuous dividend increases make the company an attractive investment opportunity. In addition, with optimistic Wall Street analyst sentiment and a potential upside of more than 20%, now may be a good time to consider owning MSFT stock.
