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Don’t Buy Microsoft Corporation (MSFT) Stock … Yet

MSFT stock looks expensive when you consider that it’s biggest growth prospect, Azure, makes up less than 10% of its business

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The Dividend

Microsoft pays its investors a 2.15% dividend yield — unheard of in the tech space. So that’s a bonus. But still, there are a lot of cheaper dividend stocks out there if you look to other industries.


There is something to be said for Microsoft’s acquisition of business networking site Linked In. The platform helps connect professionals and organizations and will likely help the company expand its enterprise relationships, but I don’t think it’s a game changer.

Beyond perhaps helping Microsoft make connections, Linked In doesn’t contribute much to Microsoft’s bottom line. In the most recent quarter, LinkedIn had revenue of $1.1 billion, but it also cost Microsoft $1 billion to run, so the gains were minimal.

Bottom Line on MSFT Stock

Microsoft is on its way to delivering impressive growth if it can grow Azure revenue beyond the measly >10% of the firm’s overall operating income. Right now, I think MSFT stock is expensive for what it is.

Without any other compelling growth prospects, I’d only consider buying Microsoft stock if it drops below $70 per share.

As of this writing, Laura Hoy was long AMZN.

Article printed from InvestorPlace Media,

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