Tuesday, 17 September 2013

Microsoft increases dividends by 22%, sets $40 billion stock buyback

Microsoft says it will raise its dividend by 22%, an increase of a nickel to 28% a share, Forbes reports .  In addition, a $40 billion stock buyback programme as bein approved by the directors, setting no expiration date. “These actions reflect a continued commitment to returning cash to our shareholders,” says Amy Hood, Microsoft’s financial chief.

Not that Microsoft has done well at returning much of anything to investors lately. The stock sits at just half the all-time high price achieved more than a decade ago.

More recently, shares have increased 33% in the past five years, compared to the S&P 500′s 53% gain. The stagnation is caused in part by missed opportunities in tablets and smartphones, and it is forcing the retirement of Microsoft’s veteran billionaire chief, Steve Ballmer.

The way tech companies share their cash has been a topic of much recent debate. Particularly for Apple. The Cupertino, Calif. Company drew criticism for its skinflint nature, first from Greenlight Capital’s David Einhorn and, more recently, from activist titan Carl Icahn.

Looking at Microsoft’s balance sheet, it’s clear it has the resources to amply satisfy these new commitments. It has $77 billion in cash and short-term investments, low debt and a steady cash flow.

No comments:

Post a Comment