With the iPhone coming out in early September, there has been much media attention on Apple (NASDAQ: AAPL). That is deserved as Apple is a great company with great products. The attention on Apple should not divert investor attention away from Microsoft (NASDAQ: MSFT) for the long term.
Many previous articles on this site have focused on Microsoft as a long term holding.
Those who have bought Microsoft have done well. The stock is up for the last month, quarter, six months, and year of market action. For 2014, Microsoft is up by nearly 16 percent. For the last week of market action, however, Microsoft has dropped by almost 2 percent (chart below).
Long term investors should consider any declines in the share price of Microsoft as any opportunity to buy at a discount.
Microsoft has a 25.40 percent profit margin. That is higher than Apple’s. It is more than twice as high as the average of about 9 percent for the Standard & Poor’s 500 Index (NYSE: SPY).
The dividend yield of Microsoft’s is also much higher than that for the average member of the Standard & Poor’s 500 Index.
At present, the average dividend for a member of the Standard & Poor’s 500 Index is around 1.9 percent. The dividend yield for Microsoft is 2.62 percent. Microsoft is also committed to raising the amount of its dividend. That means that long term shareholders get a raise simply for not selling the stock!
There is also a bullish earnings trend predicted for Microsoft.
Earnings per share this year for Microsoft are 1.90 percent. Next year, that is expected to rise to over 17 percent. For the next five years, it is estimated to be around 7.50 percent.
That is a positive trend from the present year.
Microsoft has proven itself to be a proven performer. It is up almost 40 percent in the last year of trading. For growth, value, and income investors, it should be a rewarding long term investment.