How to buy Microsoft shares
Own Microsoft shares in just a few minutes.
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Microsoft Corporation is a software-infrastructure business with stocks listed in the US. Microsoft shares (MSFT) are listed on the NASDAQ and all prices are listed in US Dollars. Its last market close was US$228.99 – a decrease of 4.97% over the previous week. Here's how to invest if you're based in Australia.
How to buy shares in Microsoft
- Compare share trading platforms. To buy shares in a US company from Australia you'll need to find a trading platform that offers access to US stock markets. If you're just starting out, look for a platform with low brokerage and foreign exchange fees.
- Open and fund your brokerage account. Complete an application with your personal and financial details, like your ID and tax file number. Fund your account with a bank transfer, credit card or debit card.
- Search for Microsoft. Find the share by name or ticker symbol: MSFT. Research its history to confirm it's a solid investment against your financial goals.
- Purchase now or later. Buy today with a market order or use a limit order to delay your purchase until Microsoft reaches your desired price. To spread out your risk, look into dollar-cost averaging, which smooths out buying at consistent intervals and amounts.
- Decide on how many to buy. At last close price of US$228.99, weigh your budget against a diversified portfolio that can minimise risk through the market's ups and downs. You may be able to buy a fractional share of Microsoft, depending on your broker.
- Check in on your investment. Congratulations, you own a part of Microsoft. Optimise your portfolio by tracking how your stock — and even the business — performs with an eye on the long term. You may be eligible for dividends and shareholder voting rights on directors and management that can affect your stock.
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What's in this guide?
- Microsoft key stats
- Compare share trading platforms
- Is Microsoft stock a buy or sell?
- Microsoft performance over time
- Can I short Microsoft shares?
- Is Microsoft suitable for ethical investing?
- Are Microsoft shares over-valued?
- Microsoft's financials
- How volatile are Microsoft shares?
- Does Microsoft pay a dividend?
- Have Microsoft shares ever split?
- Other common questions
Microsoft share priceUse our graph to track the performance of MSFT stocks over time.
Microsoft shares at a glance
|52-week range||US$131.1869 - US$245.5644|
|50-day moving average||US$230.8709|
|200-day moving average||US$217.9296|
|Dividend yield||US$2.14 (0.91%)|
|Earnings per share (TTM)||US$6.707|
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Is it a good time to buy Microsoft stock?
The technical analysis gauge below displays real-time ratings for the timeframes you select. This is not a recommendation, however. It represents a technical analysis based on the most popular technical indicators: Moving Averages, Oscillators and Pivots. Finder might not concur and takes no responsibility.
Microsoft price performance over time
|1 week (2021-02-18)||-6.07%|
|1 month (2021-01-26)||-1.44%|
|3 months (2020-11-25)||7.07%|
|6 months (2020-08-26)||3.55%|
|1 year (2020-02-26)||34.57%|
|2 years (2019-02-26)||103.80%|
|3 years (2018-02-26)||139.98%|
|5 years (2016-02-26)||346.37%|
Is Microsoft under- or over-valued?
Valuing Microsoft stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Microsoft's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
Microsoft's P/E ratio
Microsoft's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 35x. In other words, Microsoft shares trade at around 35x recent earnings.
That's relatively high compared to, say, the trailing 12-month P/E ratio for the NASDAQ 100 at the end of 2019 (27.29). The high P/E ratio could mean that investors are optimistic about the outlook for the shares or simply that they're over-valued.
Microsoft's PEG ratio
Microsoft's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 2.4406. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.
The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into Microsoft's future profitability. By accounting for growth, it could also help you if you're comparing the share prices of multiple high-growth companies.
Microsoft's EBITDA (earnings before interest, taxes, depreciation and amortisation) is US$71.7 billion (£51.5 billion).
The EBITDA is a measure of a Microsoft's overall financial performance and is widely used to measure a its profitability.
|Revenue TTM||US$153.3 billion|
|Operating margin TTM||39.24%|
|Gross profit TTM||US$96.9 billion|
|Return on assets TTM||12.81%|
|Return on equity TTM||42.7%|
|Market capitalisation||US$1.8 trillion|
TTM: trailing 12 months
Shorting Microsoft shares
There are currently 44.5 million Microsoft shares held short by investors – that's known as Microsoft's "short interest". This figure is 6.2% up from 42.0 million last month.
There are a few different ways that this level of interest in shorting Microsoft shares can be evaluated.
Microsoft's "short interest ratio" (SIR)
Microsoft's "short interest ratio" (SIR) is the quantity of Microsoft shares currently shorted divided by the average quantity of Microsoft shares traded daily (recently around 32.0 million). Microsoft's SIR currently stands at 1.39. In other words for every 100,000 Microsoft shares traded daily on the market, roughly 1390 shares are currently held short.
However Microsoft's short interest can also be evaluated against the total number of Microsoft shares, or, against the total number of tradable Microsoft shares (the shares that aren't held by "insiders" or major long-term shareholders – also known as the "float"). In this case Microsoft's short interest could be expressed as 0.01% of the outstanding shares (for every 100,000 Microsoft shares in existence, roughly 10 shares are currently held short) or 0.0059% of the tradable shares (for every 100,000 tradable Microsoft shares, roughly 6 shares are currently held short).
Such a low SIR usually points to an optimistic outlook for the share price, with fewer people currently willing to bet against Microsoft.
Find out more about how you can short Microsoft stock.
Microsoft's environmental, social and governance track record
Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like Microsoft.
When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.
Microsoft's total ESG risk score
Total ESG risk: 18.94
Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and Microsoft's overall score of 18.94 (as at 01/01/2019) is excellent – landing it in it in the 11st percentile of companies rated in the same sector.
ESG scores are increasingly used to estimate the level of risk a company like Microsoft is exposed to within the areas of "environmental" (carbon footprint, resource use etc.), "social" (health and safety, human rights etc.), and "governance" (anti-corruption, tax transparency etc.).
Microsoft's environmental score
Environmental score: 2.97/100
Microsoft's environmental score of 2.97 puts it squarely in the 6th percentile of companies rated in the same sector. This could suggest that Microsoft is a leader in its sector terms of its environmental impact, and exposed to a lower level of risk.
Microsoft's social score
Social score: 11.87/100
Microsoft's social score of 11.87 puts it squarely in the 6th percentile of companies rated in the same sector. This could suggest that Microsoft is a leader in its sector when it comes to taking good care of its workforce and the communities it impacts.
Microsoft's governance score
Governance score: 6.59/100
Microsoft's governance score puts it squarely in the 6th percentile of companies rated in the same sector. That could suggest that Microsoft is a leader in its sector when it comes to responsible management and strategy, and exposed to a lower level of risk.
Microsoft's controversy score
Controversy score: 3/5
ESG scores also evaluate any incidences of controversy that a company has been involved in. Microsoft scored a 3 out of 5 for controversy – a middle-of-the-table result reflecting that Microsoft hasn't always managed to keep its nose clean.
Environmental, social, and governance (ESG) summary
|Total ESG score||18.94|
|Total ESG percentile||11.18|
|Environmental score percentile||6|
|Social score percentile||6|
|Governance score percentile||6|
|Level of controversy||3|
Microsoft share dividends
Dividend payout ratio: 31.89% of net profits
Recently Microsoft has paid out, on average, around 31.89% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 0.96% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), Microsoft shareholders could enjoy a 0.96% return on their shares, in the form of dividend payments. In Microsoft's case, that would currently equate to about $2.14 per share.
While Microsoft's payout ratio might seem fairly standard, it's worth remembering that Microsoft may be investing much of the rest of its net profits in future growth.
Microsoft's most recent dividend payout was on 11 March 2021. The latest dividend was paid out to all shareholders who bought their shares by 17 February 2021 (the "ex-dividend date").
Have Microsoft's shares ever split?
Microsoft's shares were split on a 2:1 basis on 18 February 2003. So if you had owned 1 share the day before before the split, the next day you'd have owned 2 shares. This wouldn't directly have changed the overall worth of your Microsoft shares – just the quantity. However, indirectly, the new 50% lower share price could have impacted the market appetite for Microsoft shares which in turn could have impacted Microsoft's share price.
Microsoft share price volatility
Over the last 12 months, Microsoft's shares have ranged in value from as little as US$131.1869 up to US$245.5644. A popular way to gauge a stock's volatility is its "beta".
Beta is a measure of a share's volatility in relation to the market. The market (NASDAQ average) beta is 1, while Microsoft's is 0.817. This would suggest that Microsoft's shares are less volatile than average (for this exchange).
Microsoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide. Its Productivity and Business Processes segment offers Office, Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, and Skype for Business, as well as related Client Access Licenses (CAL); Skype, Outlook.com, OneDrive, and LinkedIn; and Dynamics 365, a set of cloud-based and on-premises business solutions for small and medium businesses, large organizations, and divisions of enterprises. Its Intelligent Cloud segment licenses SQL and Windows Servers, Visual Studio, System Center, and related CALs; GitHub that provides a collaboration platform and code hosting service for developers; and Azure, a cloud platform. It also offers support services and Microsoft consulting services to assist customers in developing, deploying, and managing Microsoft server and desktop solutions; and training and certification to developers and IT professionals on various Microsoft products. Its More Personal Computing segment provides Windows original equipment manufacturer (OEM) licensing and other non-volume licensing of the Windows operating system; Windows Commercial, such as volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; Windows Internet of Things; and MSN advertising. It also offers Surface, PC accessories, PCs, tablets, gaming and entertainment consoles, and other devices; Gaming, including Xbox hardware, and Xbox content and services; video games and third-party video game royalties; and Search, including Bing and Microsoft advertising. It sells its products through OEMs, distributors, and resellers; and directly through digital marketplaces, online stores, and retail stores. It has a strategic collaboration with DXC Technology. The company was founded in 1975 and is headquartered in Redmond, Washington.
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