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Author: Alan LittleDate: 2021-09-16

Microsoft (MSFT) boosts its dividend and initiates $60bn buyback

Microsoft’s (MSFT) dividend bump and $60bn buyback announcement spark investor interest as the tech giant comes within reach of its all-time-high share price with some gains this week.

Microsoft (MSFT) has invoked investor interest with its market performance since Monday (13th September).

The tech giant’s shares remain bullish as it achieved close to a 2% increase during morning trading hours on Wednesday (15th September).

Despite slipping a bit during the day, MSFT shares managed to end the day on a positive note and stayed in the green by 1.68%, with shares selling at $304.82 apiece.

After-hours trading saw MSFT shares rising by another 0.16%.

This minute increase catapulted MSFT over the $305 barrier.

In an attempt to capitalise on these gains and spark investor interest, Microsoft announced an 11% dividend boost and a notable $60bn buyback programme.

Experts, however, remarked that even with the dividend boost, the company’s dividend yield still sits at a meagre 0.83%.

These experts went on to point out that the $60bn buyback looks impressive when viewed in isolation, but hardly constitutes a drop in Microsoft’s market cap ocean, which exceeds $2.25tn.

This leaves investors with the question of whether or not to buy MSFT shares and invest in Microsoft’s prospects.

The answer seems to lean towards a ‘yes’ here.

Baron Opportunity Fund, an investor in high growth businesses, highlighted Microsoft as one of the stocks in its Q2 2021 Investor Letter.

This investor stated that Microsoft displayed a “strong earnings report highlighting solid demand for its broad product stack”.

In the three months leading up to August 2021, MSFT stock gained 20%.

Investors naturally find these gains tempting.

Analysts advise that potential investors gauge market reactions to the MSFT dividend and buyback announcements while at the same time confirming Microsoft’s strong current position.

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