Microsofts quarterly dividend is 042 per share or 168

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Microsoft’s quarterly dividend is $0.42 per share, or $1.68 annually, for a yield of about 1.8%. Our FY18 dividend estimate is $1.65 and our FY19 forecast is $1.69. Microsoft bought back $4.6 billion of its stock in 1H18, $11.8 billion in FY17, and $16 billion in FY16. RISKS Investors in Microsoft face potential losses if the company’s operating performance falls short of expectations. For example, Microsoft took a $7.5 billion write-off for Nokia Devices and Services (NDS), writing down 80% of the purchase price in a little more than a year following the acquisition. The company has also taken additional large write-offs. Other risks include the migration of consumers away from the PC to mobile devices that do not use a Microsoft-based operating system (e.g. Apple’s iPad); the potential for a prolonged downturn in global software investment spending; the well-publicized security vulnerabilities in the company’s products; the possible adoption of Linux, and/or other open-source software applications; increased competition in the internet space; and legal risks. Also, piracy of the company’s software in developing markets like China and India is an ongoing problem and presents the company with huge missed revenue opportunities. Another risk is management’s ability to execute its business plan and deliver new products on schedule. In the case of the Xbox 360, highly aggressive pricing from both Sony and Nintendo, as well as a generally soft game console market, may hamper Microsoft’s efforts to generate acceptable long-term profits in this area.
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M ARKET D IGEST - 10 - The company also faces intense direct competition from Google in many areas, including internet search, mobile operating system software and internet-based software applications. This competition could potentially erode the dominance of Microsoft’s core operating system and Office applications. Google has established itself as the dominant online search player, and has used its position to branch out into direct competition with Microsoft with its Chrome internet browser and operating system software. Microsoft has struck back through its alliance between its internet search engine Bing and Yahoo. On the mobile smartphone operating system front, we think that Apple’s iPhone operating system and Google’s Android platform are clearly dominant, a fact that Microsoft itself acknowledged when it restructured its NDS operations in 4Q15. Without a mobile platform, other than the also-ran Surface tablet computer, Microsoft is missing a key future growth vector. COMPANY DESCRIPTION Microsoft is the world’s largest independent software developer. The company was founded on the MS Windows operating system and MS Office business applications suite for PCs. As it has grown, Microsoft has expanded into enterprise software with Windows Server, SQL Server, Dynamics CRM, SharePoint, Azure and Lync; hardware with the Xbox gaming/ media platform; and online services through MSN and Bing. Microsoft acquired Skype, the internet VoIP communications service, in October 2011. The company acquired Nokia’s Devices and Services Business in April 2014. About 47% of revenue
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