Microsoft Stock - MSFT Stock Price - Learn About Microsoft Stock
Let me begin this post with a quick disclaimer: I am actually quite fond of Microsoft products. My computer runs on Windows XP, I often use the Office Suite of software and I even open Internet Explorer once in a while. With that said, while I am a fan of most of what Microsoft sells, I'm not interested in owning the firm's equity.
Click Here to Visit TheStockGuy.com and Learn More About Microsoft
There are several valid reasons to be positive on Microsoft's shares over the next couple years. The firm is trading at one of its lowest P/E ratios in history (around 14), has a ton of cash and other current assets on the balance sheet and is a market leader in the software business. Microsoft also pays a dividend and currently yields 2.2% annually. The company's software offerings will continue to be popular and its new operating system (Windows 7) has received positive reviews.
Click Here to Visit TheStockGuy.com and Learn More About MSFT
My main issue with Microsoft is its lack of growth prospects moving forward. Yes ' its software business is a cash cow, but the stock doesn't have a high enough yield to be held like a utilities company. Seven years ago, Microsoft was trading at around $26. Looking at today's price of just north of $23 (and including dividends), the company has been dead money for the better part of a decade. This history doesn't exactly inspire confidence. In fact, for the majority of that seven year period, Microsoft traded at between $25 and $30. That trading range doesn't give much hope that the stock will break out anytime soon.
Apart from looking at a graph of the share price history, one only needs to look at potential growth areas of the business, such as realm of online search and advertising, to see its problems. This is an area which Microsoft has been working on improving for years, yet Google just keeps moving further ahead. Early reviews of Microsoft's new search engine 'Bing' have been mildly positive, but it seems more likely that this new site will challenge Yahoo than steal market share from Google. If you want to buy a steady, slow growth company, at least grab one with a nice fat yield like AT&T (6.8%). If it's a technology stock with significant earnings growth and positive upside that you're after, invest in a company like RIM or even Apple instead.
The Stock Guy's Official Ranking: 5 out of 10
About the Author:
The Stock Guy speaks his mind about the market. Click Here to Visit TheStockGuy.com
