Should I buy Oracle shares after the company increased its quarterly dividend?

Oracle Corporation (NYSE: ORCL) reported solid fourth-quarter results this Monday, and the company's shares advanced on a weekly basis.

Oracle increased its quarterly dividend by 18.5%, and Chief Executive Safra Catz said the company expects first-quarter revenue to grow between 20% and 22% from a year ago.

Oracle increased its quarterly dividend

Oracle Corporation is an American multinational computer technology corporation that sells software, cloud-engineered systems, and enterprise software products.

Oracle reported fourth-quarter results this Monday; total revenue has increased by 5.4% Y/Y to $11.84 billion, while the non-GAAP earnings per share were $1.54 (beats by $0.16). Safra Catz, Chief Executive Officer of Oracle, said:

Total cloud services and license support revenues grew 3% Y/Y to $7.61 billion, accounting for 64% of total company revenue. Cloud and on-premise licensing revenue have increased by 16% to $2.54 billion, while hardware sales declined by 3% to $856 million.

For the quarter, the gross margin for cloud services and license support was 82%, and the gross profit dollars grew 4%. Oracle will continue to invest in growth, and the company will continue to return value to its shareholders through technical innovation, strategic acquisitions, stock repurchases, prudent use of debt, and a dividend.

During the fourth quarter, Oracle repurchased 8 million shares for a total of $600 million, and it is important to mention that the company paid out dividends of $3.5 billion over the last 12 months.

Positive information is that the board of directors declared a $0.32/quarterly share dividend this week, which represents an increase of 18.5% compared with a prior dividend of $0.27. The dividend will be payable on July 26 to stockholders of record as of July 12, 2022.

Chief Executive Safra Catz said the company expects first-quarter revenue to grow between 20% and 22% from a year ago, while the earnings per share should be in a range of $1.09 to $1.13.

Fundamentally looking, Oracle trades at less than ten times TTM EBITDA, and with the market capitalization of $185 billion, shares of this company are reasonably valued.

$60 represents a strong support level

The strong support level stands at $60, while $75 represents the first resistance level. If the price falls below $60, it would be a "sell" signal, and we have the open way to $55 or even below.

On the other side, if the price jumps above $75, the next target could be at $80.

Summary

Oracle Corporation reported better than expected fourth-quarter results, and the company's management announced a decision to increase the quarterly dividend. Oracle will continue to invest in growth, and Chief Executive Safra Catz said the company expects first-quarter revenue to grow between 20% and 22% from a year ago.