Could it be that Microsoft (
) is making a turnaround? That's what the
Wall Street Journal
argues, pointing to the new Outlook e-mail and upcoming Surface
tablet as positive signs that the company is playing to its core
panning it got in Vanity Fair
was perhaps another positive sign, on the theory that major
magazines run feature stories only after the market has priced in
the news they're reporting.
But rather than think of Microsoft as a company trying to
regain its glory days as a growth stock, think of it instead as a
utility. And if that's the case, take a look at this.
Yes, net income has risen smartly along with R&D inputs
over the past decade. But Microsoft watchers would argue that the
increase in profits has come largely from milking the company's
existing franchise in PCs. Keeping there, of course, requires
ongoing R&D. But the efforts at new and transformative
products hasn't been very productive.
From that point of view, Microsoft's research budget looks
bloated. As YCharts reported
, it far outstrips the research and development spending at Apple
). So if Microsoft is really changing with the times, adapting to
today's market, it seems like it would slim this down.
And perhaps return more of its profits to shareholders. Here
we see a nice
and, with a relatively low payout ratio, plenty of room to hike
MSFT Dividend Yield
From the editors of YCharts.
YCharts Pro Investor Service