Microsoft Share Price: Dividend May Be Boosted, Source Says

on Aug 28, 2013
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iNVEZZ.com Wednesday, August 28th: Microsoft Corp. (NASDAQ:MSFT) may raise dividend payouts amid calls by an activist shareholder to return more cash to investors, Bloomberg has reported.

ValueAct Holdings LP, which manages assets of more than $11 billion, has been seeking a return of more cash to investors, according to a source familiar with the matter, the newswire has said. The capital management company disclosed a stake of some $1.9 billion in Microsoft in April.
According to data compiled by Bloomberg, Microsoft is poised to boost quarterly dividend to 26 cents, up 13 percent. Analysts’ forecasts are slightly lower at 25 cents a share.

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For the last several years the software maker’s board has raised quarterly dividend in September in line with rising operating income. The last two years saw dividend rise to 23 cents a share after the board added 3 cents in 1012 and 4 cents in 2011.

Microsoft’s next dividend decision will have to balance between the prospects of incurring tax on cash held overseas, if the increase is too large, and not satisfying investors, if it is too small. The company reported in a filing for the fiscal year ended June 30, 2013, that most of its cash, standing at almost $70 billion, was held overseas.
!m[Activist Investor Urging Software Maker to Return More Cash to Shareholders](/uploads/story/5152/thumbs/pic1_inline.jpg)

The latest quarterly results of the company have failed to meet analysts’ estimates due to the shrinking Windows business and the weak sales of the Surface tablet, which led to a $900 million inventory writedown. The company also incurred impairment charges of $6.19 billion last year. These developments may discourage Microsoft from providing a large dividend boost, according to Sid Parakh, an analyst at McAdams Wright Ragen in Seattle.

The board has another important decision to make in the near future after CEO Steve Ballmer announced last week that he would step down within a year. A committee has already been formed to look into both internal and external candidates.
Right before yesterday’s close of the session on the NASDAQ investors traded Microsoft’s shares at $33.26, down from the opening level of $33.51.
**As of 13.16 BST buy Microsoft shares at $33.29.**
**As of 13.16 BST sell Microsoft shares at $33.21.**

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