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Microsoft has announced another stock buyback program, worth about $40 billion. The company has also said that it will increase dividends paid to shareholders by as much as 11%. MSFT is now the most valuable stock in the market.
The Microsoft Corporation (MSFT) has announced interesting plans to buy back up to $40 billion in stock and to also raise the dividends payable to shareholders by up to 11%. This new buyback plan, as well as the plans to increase quarterly dividends, could see shareholders receiving up to 51 cents per share.
This is definitely not the first time that Microsoft has undergone a large buyback plan as its board did authorize two before now, with the first in 2013 and the previous one in 2016. Microsoft has said that at the moment, there’s no specific date of expiration for the buyback plan which means that the company can decide to end it anytime they choose to.
This year alone, MSFT stock has jumped by 36% which has pushed its entire market capitalization to $1.1 trillion, ultimately making it the most valuable company in the market. It might be interesting to point out here that there are many people who might benefit from Microsoft even if they do not directly own shares. This is because MSFT is largely available in many funds and ETFs in the market, so Microsoft’s good times could be beneficial to people who might not even realize it first-hand.
A lot of the company’s success and growth, especially with its shares, has been credited to its current CEO, Satya Nadella, who became the company’s third CEO after Bill Gates and Steve Ballmer, back in February 2014. Between the 2017 and 2019 fiscal years the company, through its buyback program, has spent close to $36 billion to repossess about 419 million shares.
Somehow, Microsoft has been able to stay on the right side of the law and has avoided several privacy and trust issues that other large tech firms such as Google, Facebook and Amazon have not been so lucky with. This low profile has been praised by analysts and investors as well, especially because the company mostly still finds a way to benefit from issues, even when they seldom come up.
Microsoft also seems to be cashing out quite well from its several cloud computing services. Cloud-specific sales increased by 39% and accounted for about a third of the company’s entire sales in the same period. Now, Microsoft has said that it will continue to grow these services, especially the cloud-based Office productivity suite and also the Microsoft Azure, which is the second biggest after Amazon‘s AWS.
The company still believes that the current fiscal year should see significant growth in double digits, even though back in April, Gartner Inc., a data and research firm, said Microsoft’s expenditure on its cloud-based offerings will shoot up 18%, crossing $214 billion.
MSFT is currently at $138.52, increasing 0.82% from it’s $137.39 previous close with a 35.38% increase since January and 21.97% over the last 12 months.