Microsoft announces $40 billion stock repurchasing plan alongside increased quarterly dividend

Microsoft earlier today announced a $40 billion stock buyback alongside a 22% increase in its quarterly dividend payouts.

With Microsoft apparently in flux - given the impending departure of Ballmer and the recent acquisition of Nokia's handset business - the company announced a move on Tuesday that should please long-suffering stockholders of Microsoft.

Microsoft earlier today announced a $40 billion stock buyback alongside a 22% increase in its quarterly dividend payouts. The new dividend payout will now be $0.28 a share and will first be payable to sharehlders on December 12, 2013.

The press release reads in part:

The board of directors also approved a new share repurchase program authorizing up to $40 billion in share repurchases. The new share repurchase program, which has no expiration date, replaces the previous $40 billion share repurchase program that was set to expire Sept. 30, 2013.

“These actions reflect a continued commitment to returning cash to our shareholders,” said Amy Hood, chief financial officer of Microsoft. 

Investors in Microsoft can only hope that this has some discernable impact on the company's share price. Anyone who has kept on eye on Microsoft stock over the past few years knows that the stock has languished in the mid-20 and lower 30-dollar range for years upon years. Meanwhile, competitors like Google and Amazon have seen their respective share prices yield triple-digit returns.

Of course, that's largely due to the fact that Microsoft continues to occupy a laggard position in both the smartphone and tablet markets. Sales of Micrsoft's Surface tablets, for example, have come in far below expectations. Indeed, sales have been so poor that Microsoft was forced to issue steep price cuts on its tablet devices.

Looking ahead, it will be particularly interesting to keep an eye on who Microsoft chooses to replace Steve Ballmer.

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