Software giantMicrosoft (
) is battling criticism of its Windows 8 operating system,
declining PC sales and stiff competition for its Xbox game
Yet the stock is up 25% this year, easily outpacing the
S&P 500. It's getting support at its 50-day line after
running up past a 31.71 saucer buy point. The test of support
normally puts a stock in a follow-on buy area, but the market's
correction makes any new purchases risky.
Meanwhile, the Redmond, Wash.-based company has increased its
dividend steadily since its debut at 8 cents a share in late
2004. It raised the quarterly payout this fiscal year by 15% to
23 cents a share, or 92 cents annually. That's good for an annual
yield of 2.7% at the current share price, topping the S&P 500
average of 2.5%.
Microsoft had ranged between a high of 32.95 and a low of
22.73 for several years. But a better-than-expected quarterly
earnings report in April propelled the stock to a peak of 35.78,
its highest since Jan. 2008.
Zacks Investment Research said in a June 11 note that
Microsoft's "dominant position in the PC market continues to be
challenged by new-age devices, as well as weak consumer spending
in developed countries."
However, it added that the company's "huge core business,
promising new products, enterprise refresh cycles and
cost-reduction initiatives are driving strong cash flows and
Microsoft's Composite Rating is 90, indicating that it's
outperforming 90% of all listed companies in five key fundamental
Its three-year earnings stability factor is 5 on a scale of 0
to 99, with 0 being most stable. Profit for the fiscal year
ending this month is expected to dip 1% to $2.75 a share before
rebounding 11% in fiscal 2014.