Microsoft Shares Rise 1.5% After Dividend Announcement

Microsoft Co. (NASDAQ:MSFT - Get Free Report) experienced a notable increase in its share price, rising 1.5% during trading on Wednesday, following the company's recent dividend announcement. The stock peaked at $439.55 before settling at $437.54 at the end of the trading day. A total of 7,004,814 shares traded hands, marking a 66% decline from the average session volume of 20,481,127 shares. The previous closing price for the stock was $431.20.

The dividend announced will be distributed on Thursday, March 13th, and stockholders of record on Thursday, February 20th, will receive $0.83 per share. This dividend translates to an annual payout of $3.32, providing a dividend yield of 0.76%. Microsoft's current payout ratio stands at 27.39%.

Wall Street Analyst Opinions

A variety of research firms have recently provided insights on MSFT shares. TD Cowen, for instance, reduced their price target from $495.00 to $475.00 while maintaining a "buy" rating on the stock in a report dated October 31st. Wells Fargo reaffirmed their "buy" rating on October 18th, while KeyCorp increased its target from $490.00 to $505.00. The Goldman Sachs Group adjusted its price target from $515.00 to $500.00, also classifying the stock as a "buy." Lastly, on November 19th, Wedbush reaffirmed an "outperform" rating and set a $550.00 price target for Microsoft. Presently, 28 analysts have issued buy ratings while two have rated the stock as a hold, resulting in an average rating of "Moderate Buy" and a mean price target of $503.03 according to MarketBeat data.

Microsoft's Financials and Performance Metrics

Microsoft boasts a debt-to-equity ratio of 0.15, with a quick ratio of 1.29 and a current ratio of 1.30. The company has a market capitalization of $3.26 trillion, a price-to-earnings ratio of 36.10, a PEG ratio of 2.29, and a beta of 0.90. In its recent performance, the stock achieved 50-day and 200-day moving averages of $420.83 and $426.70, respectively.

On October 30th, Microsoft released its latest quarterly earnings report, revealing earnings per share (EPS) of $3.30, exceeding the consensus estimate of $3.10 by $0.20. The company's revenue for the quarter totaled $65.59 billion, surpassing analyst predictions of $64.57 billion. Microsoft reported a net margin of 35.61% and a return on equity of 34.56%, with a year-over-year revenue growth of 16.0%. Analysts anticipate that Microsoft's EPS for the current year will reach 12.93.

Share Repurchase and Insider Transactions

On September 16th, Microsoft’s Board of Directors approved a significant share repurchase plan, allowing for the buyback of up to $60.00 billion in shares. This plan enables Microsoft to buy back as much as 1.9% of its shares through open market purchases, suggesting that the board believes the stock may be undervalued.

In related corporate activity, insider Bradford L. Smith sold 40,000 shares on September 9th at an average price of $402.59, totaling approximately $16.1 million. This transaction reduced his holdings by 6.84%. Meanwhile, CFO Amy Hood sold 38,000 shares on September 5th at approximately $410.55 each, amounting to about $15.6 million, which decreased her shares by 7.11%. Over the last 90 days, insiders have collectively sold 134,578 shares valued at $55.3 million. Currently, corporate insiders hold just 0.03% of the company's stock.

Institutional Investor Activity

Recent changes in institutional ownership show that several hedge funds have adjusted their positions in Microsoft. For example, Christopher J. Hasenberg Inc increased its holdings by 169.2% during the second quarter, now owning 70 shares worth approximately $31,000. Quarry LP entered a new position valued at around $45,000, while MidAtlantic Capital Management and Innealta Capital each acquired stakes worth about $62,000 and $75,000, respectively. Bellevue Group AG raised its investment by 47.5% in the first quarter, bringing their total to 180 shares valued at $76,000. Currently, institutional investors collectively own 71.13% of Microsoft's shares.

About Microsoft

Microsoft Corporation is a global leader in developing and supporting a wide range of software products, services, devices, and solutions. Its offerings include productivity and business services such as Office, Exchange, SharePoint, Microsoft Teams, and Microsoft 365.

Microsoft, Shares, Dividend