In a move that went largely unnoticed with all of the other market news going on, Microsoft hiked its dividend last week by 25% (from $.16 to $.20 per share) in an effort to boost its stock.
If ever there was a major stock that fit Gordon Gekko's "dog with fleas" description, MSFT would be it. It's nicknamed Mister Softee for a reason; namely, its stock price is exactly where it was five years ago. Zero progress.
When it announced its first dividend around 2003, it was in part an admission of reality--the stellar growth from 1986-2000 was no more, and investors needed more convincing to buy MSFT stock.
Google and Apple have rocketed ahead while Steve Ballmer and friends and stagnated, although announcing your first dividend is usually taken as a sign that a company is maturing and must turn to innovation to stay profitable. The big question now is whether that innovation is forthcoming from Mister Softee.
They clearly have a lot riding on Bing and Windows 8 (due next year for greater compatility with tablets). There has also been a surprise hit product with Xbox, and the next round of console wars will definitely be intereseting to watch down the stretch.
If all of these things work out for them, will the company lose its near-decade-old "dog with fleas" status, or keep it? Or is it a desperate move to distract from the real situation in the boardroom..."we don't really know what we're doing here?"
Can't blame them for the dividend increase... with more cash on its balance sheet than any other public company (~$38 billion), it's hard to put it to good use.
Uhh Apple?
i just checked google so if you buy it now, you would be getting (0.2/26) = barely 0.8% return per year
i dont think it's a good trade considering there are wayyyyy better opportunity out there (even index like xle or spy).
umm that's a quarterly dividend, you'll get .80 cents/share annually or 0.80/25.89 = 3.089% yield
my bad, i calculated wrong and it's a ~3% yield. But still, would anyone be satisfied with a 3%?i think the 30 year treasury is already yielding 2.85% now.
Price appreciation and dividend growth.
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