Microsoft (MSFT) May Have More for Investors After Smaller-than-Expected Dividend Hike - Nomura

Nomura Securities analyst Rick Sherlund weighed in on Microsoft (NASDAQ: MSFT) after the company increased its dividend just 11%, which was light of expectation. Sherlund said investors should stay tuned for more.

Sherlund commented, "Our interpretation is that the dividend increase may be more tied to the increase in operating income in the prior years. Our interpretation of the comment from the CFO is that the Board has been focused on the transformation of the business and the dividend increase is just a first step in considering the commitment to increase capital returns for shareholders, in other words, be patient and stay tuned for more. We have advocated for a 10% share repurchase. Also announced were the appointments of Teri List-Stoll and Charles W. Scharf to the Board of Directors. We have expected some changes in the composition of the Board at Microsoft and we also have expected some change in the dynamics of the Board room."

The firm maintained a Buy rating and price target of $50 on MSFT.

For an analyst ratings summary and ratings history on Microsoft click here. For more ratings news on Microsoft click here.

Shares of Microsoft closed at $46.76 yesterday.

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