Microsoft Corporation (MSFT): Ready For This?

So will Microsoft finally breakout?

Maybe, maybe not. It should, if judged by its earnings. But there is also the whole “the market can stay irrational longer than you can stay solvent” thing. It took a decade for Johnson & Johnson (NYSE:JNJ) and Wal-Mart Stores, Inc. (NYSE:WMT) to achieve their rightful place in the sun, and that is a long time to wait.

Some things Microsoft Corporation (NASDAQ:MSFT) does have going for it, however, is its dividend paying well over 3%, which will give you some help being patient should you choose to invest. The company is also aggressively buying back shares and reducing its float as well. The stock will still need catalysts to break out.

Its impressive earnings in the midst of the worst drop off in PC shipments since 1994 helped the stock pop a little, but not exactly in the same straight upward way as a Johnson & Johnson (NYSE:JNJ) or a Wal-Mart Stores, Inc. (NYSE:WMT) style break-out.

The stock may need further catalysts to genuinely and sustainably break-out, which could include a series of nice quarters now that the market has begun paying more attention. Current CEO Steve Ballmer getting the boot would also likely jump start the broken stock, but with earnings shooting up consistently and Windows 8 doing better than initially thought, he will probably keep his job as long as this trend stays the same.

The bottom line

Microsoft seems to be one of the “safest” (if there is such a thing) blue-chips you can buy now. The software giant is one of only four companies left with a triple A debt rating. The company has posted impressive and resilient earnings consistently for a decade, which, if you believe in the whole Buffett/Ben Graham style philosophy of “the market is a voting machine in the short-term and a weighing machine in the long-run” should pay off.

It’s just a matter of when, but as the company continues to increase earnings under the guise of a flat share-price, the share price is getting heavier and heavier and Mr. Market will eventually feel the heaviness and correspond. Worst case scenario investing in Microsoft Corporation (NASDAQ:MSFT) now? You get a high-yielding dividend payment while waiting and not much downside risk. Sounds like a good deal to me.

The article Why Microsoft May Be Ready to Finally Breakout originally appeared on Fool.com.

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