Anyone who looks at a stock chart of Microsoft Corporation (NASDAQ:MSFT) will stare in awe at how this technology giant has been able to create value in recent years. At the time of writing, shares of Microsoft are up approximately 75% over the past year, as investors have piled into technology names like Microsoft that have stable and recurring revenues, a path toward continued sustainable growth, and a dividend.
Microsoft is, after all, one of the very few technology names that has shown substantial and sustained profitability over decades- a truly amazing feat.
I’ve been a Microsoft bull for some time now, and have continued to follow the company’s transformation over the past ten years from a pure play software company to a well-diversified technology giant with incredible earnings and a very elusive dividend (Microsoft’s dividend used to be quite juicy, even as recent as 2015, but the company’s share price rise has largely eroded the yield of late).
Perhaps the most notable aspect of Microsoft’s core business for me right now is the firm’s strong presence in cloud computing- currently, Microsoft sits in third place in terms of U.S. companies operating in this space, and expectations for the future are that the company will continue to outperform.
Like many other technology names out there, Microsoft has experienced a multiple expansion, meaning investors are now willing to pay more for a piece of the Microsoft pie than a year ago. While the price tag has indeed steepened, I do still believe Microsoft is a great name to put in your "forever" portfolio and forget about for 10 to 20 years, given the company’s solid mix of stable businesses providing real and sustainable earnings, and now businesses, providing growth opportunities for the future.
Invest wisely, my friends.
