Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.
Microsoft Corporation (NASDAQ: MSFT) will soon start playing catch-up with other large-cap tech companies in the rate at which it returns capital to shareholders in the form of dividends and buybacks, an analyst said Tuesday.
Citi's Walter H. Pritchard expects the company to boost its dividend later this month by 25 percent to $1.40 per share. Microsoft may also set a 2015 free cash-flow payout ratio target of up to 70 percent, from a current 58 percent.
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
But the average large-cap tech company will pay out 83 percent of free cash flow in 2014, according to Pritchard, who is Neutral on Microsoft with a $41 target.
Investors are expecting a "meaningful uptick in dividend" and look to the company's last big dividend increase of 25 percent in 2011.
"That sets the bar," Pritchard said, noting that disappointment and a lower stock price is likely to ensue if expectations aren't met.
Although the software company has about $86 billion in total cash, just 10 percent of it is based in the United States. Moreover, only about 25 percent of Microsoft's annual free cash flow is generated domestically. Given tax penalties for repatriating cash, "capital return therefore comes down to how much the company is willing to borrow," Pritchard said.
Assuming Microsoft aims to retain its investment-grade credit rating, Pritchard figures debt that can be raised is capped at $50 billion. Given those constraints, the company can boost free-cash payout to between 70 percent and 80 percent, "while still retaining flexibility" for things like acquisitions, the analyst said.
Microsoft traded recently at $46.69 per share, up one percent.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.