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Hold Microsoft as It Proves Its Value With Buybacks and Cybersecurity Wins

Sometimes a company has been around for so long that people tend to take it for granted. This may be the case with Microsoft (NASDAQ:MSFT), as MSFT stock has been an investors’ mainstay for generations.

MSFT stock: A Microsoft office building

Source: gguy / Shutterstock.com

What we might forget is that Microsoft started off as a technology innovator, and the company is still pushing the envelope today. Besides, the company is also known for being very good to its loyal, long-term shareholders.

As we’ll see, MSFT stock lost some of its value during the back half of September. However, this doesn’t mean Microsoft is in trouble, or that it’s time to dump your shares.

Moreover, in a time when cyberattacks are becoming increasingly common and sophisticated, Microsoft continues to demonstrate its responsiveness and reliability.

MSFT Stock at a Glance

Suffice to say that in spite of the occasional hiccup, MSFT stock has steadily moved higher in 2021 so far.

We’re talking about a consistent climb from less than $220 to $300 in just nine months’ time. However, in August and September, $300 proved to be a frustrating resistance level.

Of course, $300 will be a distant memory at some point in time. September provided some turbulence for the shareholders, but that was emblematic of a broader sell-off in the stock market. The dip in its stock price was not Microsoft’s fault, really.

After rallying for much of the year, MSFT stock might seem overpriced to some folks. But that’s not necessarily the case at all.

Consider this: Microsoft’s trailing 12-month price-to-earnings ratio is 36.38x. For a technology company in 2021, that’s not excessive.

MSFT stock also has something to offer dividend collectors who like to leverage the magic of compounding. So, we’ll discuss the details of that now, plus other reasons to stick with Microsoft.

Dividends and Buybacks

Not long ago, Microsoft revealed two developments which ought to keep the company’s investors happy.

The first news item is that Microsoft’s board of directors declared a quarterly dividend of 62 cents per share. This reflects an 11% increase over the previous quarter’s dividend.

Increasing a company’s dividend payouts is typically a good sign. It means the business is probably in a solid financial position and respects its shareholders.

Furthermore, Microsoft’s board of directors approved a new share repurchase program authorizing up to $60 billion in share repurchases.

This share buyback program has no expiration date. Investors can interpret this program as an indication of Microsoft’s confidence in its own business.

After all, companies usually don’t buy their own shares if management and other insiders are really worried.

Microsoft Is Foiling the Attack

If you’re in the mood for something dramatic and geeky at the same time, then check this out.

Just recently, Microsoft effectively foiled a massive cyberattack. In fact, it was reportedly one of the biggest Distributed Denial-of-Service (DDoS) attacks ever recorded.

This was a 2.4 terabits per second (TBPS) DDoS attack that targeted a Microsoft Azure customer in Europe. Shockingly, the attacks on its cloud service customers in August were 140% higher than previously detected events on Azure.

According to Microsoft, the attack lasted for more than 10 minutes. Amir Dahan, a senior program manager for Microsoft’s Azure networking team, provided further details:

“The attack traffic originated from approximately 70,000 sources and from multiple countries in the Asia-Pacific region, such as Malaysia, Vietnam, Taiwan, Japan, and China, as well as from the United States.”

It’s a testament to the strength of Azure’s protective protocols — and Microsoft’s ability to keep its clients out of harm’s way.

The Takeaway on MSFT Stock

After reading about how Microsoft kept attackers at bay, no one should be taking this tech giant for granted now. Besides, Microsoft continues to provide value to its investors through dividend payouts.

On top of all that, the company is confident and well-capitalized enough to initiate a new share buyback program. These are all great reasons, in case you needed them, to hold onto your MSFT stock shares for a very long time.

On the date of publication, Louis Navellier had a long position in MSFT.  Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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Article printed from InvestorPlace Media, https://investorplace.com/2021/10/buybacks-and-cyberattack-prevention-offer-motivation-to-hold-msft-stock/.

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