Microsoft (NASDAQ:MSFT) Shares Rise 1.5% After Dividend Announcement

Microsoft Co. (NASDAQ:MSFT) saw its share price increase by 1.5% in trading on Wednesday following the company's announcement of a new dividend. The stock reached a high of $439.55 before settling at $437.54 by the end of the trading session. A total of 7,004,814 shares changed hands, which is significantly lower than the average trading volume of 20,481,127 shares. The previous day, the stock had closed at $431.20.

The announced dividend is set to be paid on Thursday, March 13th, to shareholders who are on record as of Thursday, February 20th, with each share receiving $0.83. This dividend translates to an annualized payout of $3.32 and a dividend yield of 0.76%. Microsoft currently has a payout ratio of 27.39%.

Analyst Insights

Many analysts have recently provided updates on Microsoft's stock. TD Cowen lowered its price target for Microsoft shares from $495.00 to $475.00 while maintaining a "buy" rating. Wells Fargo continued its "buy" rating, whereas KeyCorp increased its price target to $505.00 with an "overweight" rating. Additionally, Goldman Sachs adjusted its target down to $500.00 but also issued a "buy" rating. Wedbush confirmed an "outperform" rating and set a higher target of $550.00 per share. Out of 30 analysts, two have a "hold" rating while 28 rated it as a "buy," resulting in an average rating of "Moderate Buy" along with an average price target of $503.03.

Microsoft’s Stock Performance

The company has a debt-to-equity ratio of 0.15 and both a quick and current ratio of approximately 1.30. Microsoft boasts a market capitalization of approximately $3.26 trillion, a price-to-earnings (P/E) ratio of 36.10, and a PEG ratio of 2.29. The stock's moving averages stand at $420.83 over the last 50 days and $426.70 over the 200-day period.

Microsoft's latest quarterly earnings report, released on October 30th, featured earnings per share (EPS) of $3.30, which exceeded analysts’ expectations of $3.10. The company's revenue totaled $65.59 billion, surpassing the forecast of $64.57 billion. Notably, Microsoft's net margin was 35.61%, with a return on equity of 34.56%, and revenue growth of 16% year-over-year.

Share Repurchase and Insider Activity

Microsoft's Board of Directors had previously authorized a significant share repurchase plan, permitting the company to buy back up to $60.00 billion worth of its shares, accounting for approximately 1.9% of its total shares. This move generally signals that the company's board believes its stock is undervalued.

In recent insider trading news, Bradford L. Smith, an insider, sold 40,000 shares at an average price of $402.59, totaling over $16 million. This transaction led to a 6.84% decrease in his holdings. Similarly, CFO Amy Hood sold 38,000 shares at an average price of $410.55, which resulted in a 7.11% decline in her ownership. Over the last 90 days, insiders sold 134,578 shares valued at around $55 million.

Institutional Investors' Activity

Recent changes in Microsoft's share ownership from institutional investors show a notable trend. Christopher J. Hasenberg Inc increased its stake by 169%, acquiring a total of 70 shares. Other investors like Quarry LP and MidAtlantic Capital Management have also taken positions in Microsoft, reflecting a broader interest in the stock as over 71% of shares are held by institutional and hedge fund investors.

Company Overview

Microsoft Corporation is a major player in the development and support of software, services, devices, and solutions on a global scale. Its offerings include popular products like Microsoft Teams, SharePoint, and Microsoft 365 subscriptions.

Microsoft, dividend, stocks