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Show Us the $, Mr. Softy

Microsoft (MSFT) recently reported earnings for their fiscal year end June 30th and the report highlights the capability they have to grow into a significant dividend payer.  The measure that is most astonishing in our mind was reported free cash flow  – this figure exceeded $24.7 billion for the year.  To put this number into perspective, it means 74.6%  of all the companies in the S&P500 have a smaller total market value than the free cash flow just generated by MSFT over the last 12 months!   With less than $12 billion in long term borrowings and total cash on the balance sheet of approximately $53 billion, the opportunity to continue to pay investors a higher cash dividend is clearly present.  Their current dividend commitment to investors is under $6 billion per year – this can and should increase.  We’ll be watching.


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