PC sales bolster Microsoft profits

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Not Quite

Actually, the 24-cents is the earnings, not the dividend. Microsoft distributes a 16-cent dividend per share, which means it'll take 45 years to get the investment back on a $29 share you buy today.

However, it is true that most companies that pay dividends aren't expected to return the cost of a share in any reasonable amount of time. What investors hope for is to buy at $29, get two years of dividends, and sell at $50. That would mean a profit of $22 or so in two years. (Note: this doesn't include what investors dream about, which is for 2000% profit in two hours. That's another story for another day).

My biggest question about this article, is how long MS can remain financially viable giving out 16-cents a share. That number won't change unless the board of directors agrees to it; and the profits have become slightly skinnier over the past few years. Seems like they're cutting it a little close, although they could always lower the dividend when/if their $42 billion mountain of cash drops to, say... $30 billion.

Maybe Longhorn and .Net will lock in the world and they'll start over-charging everyone based on a worldwide monopoly.

Posted by: bidemytime   Posted on: 10/24/03 You are currently: a Guest | Members login | Terms of Use

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