Unless you have been living under a rock your entire life you have heard of Microsoft and its founder Bill Gates. The Microsoft Windows operating system made personal computing easier and remains a driving force on PCs. It's also behind Xbox, cloud computing, Skype... you name it and Microsoft has probably been involved.
Gates is one of the richest people in the world and although he no longer owns Microsoft (just shares), many investors have followed him and his former company in an attempt to earn even a fraction of what he has earned.
As one of the top IT companies giving stiff competition to Apple and Google, Microsoft continues to break records year after year and is working with the U.S. Army for augmented reality headsets. Microsoft stock reached its highest price of $246.13 recently and is currently trading as of April 1 at $241.45. Want to get your hands on shares (or fractional shares if the price is too steep)? Let’s go through the process.
Step 1: Finding a broker that offers Microsoft Stock
The stocks of publicly traded companies are available to anyone keen on buying equity. You can purchase Microsoft stock in several ways but one of the easiest and most convenient ways to do it is through an online brokerage account. You will find several online platforms that offer the capability to purchase the stocks but each has its own commissions, fees, and minimums. Consider all the options before making a decision. If you do not have adequate funds on hand, you can buy fractional shares. Here are three online platforms that can help and how each works.
Stash makes investing easy and hassle-free for beginners. The app is suitable for those who do not have a lot of capital on hand and are new to the world of the stock market. You can easily invest in thousands of stocks through the app and the paid service is available for as low as $1 per month for a beginner account, with its premium account still cheap at $9 per month.
You do not need to make any opening deposit but there is a benefit of making one. If you deposit $5, Stash will match it and give you an extra $5 to invest. It also offers a retirement account with the growth account available at $3 per month. Then there is Stash+, which is available at $9 per month where you get investment accounts for two children, double stock rewards, monthly market insights report, and insurance.
What's great about Stash is you can buy fractional shares using the platform, which comes in handy for buying Microsoft stock. If you think that the shares are steeply priced at $241, you can choose to buy fractional shares at a cost that you can afford.
You can invest in other stocks and ETFs through Stash, which is not a robo advisor. It will not guide you on which shares to buy and instead focuses on individual shares you pick and choose. Any dividends from stocks in your portfolio are automatically reinvested for you, as well.
Pros and cons
Fractional shares of stocks sold
No minimum deposit to open an account
Minimum monthly fees, starting as low as $1
Dividends are automatically reinvested
The focus will be on your goals and not on individual stocks
M1 Finance has a personalized take on robo-advising. It is geared towards long-term investors who aim to build a strong portfolio at low costs. M1 Finance does not provide a financial advisor but it allows you to make your financial goals, build a portfolio, and manage it through its simple platform around pie investing. Hence, every investor’s portfolio is broken down into a pie chart so it is easy to understand how your assets are distributed.
You can choose one of the professionally curated portfolios based on different investment strategies and risk tolerance levels to serve as the base of your portfolio. However, for those wanting Microsoft, you can also create custom pies by choosing from the different investment products, including stocks, mutual funds, and ETFs. You can also purchase fractional shares through M1 Finance.
M1 Finance offers an individual account, joint investment account, trust account, and retirement account. The trades are commission-free but there is a minimum balance requirement of $100 for taxable accounts and $500 for retirement accounts. If you have a portfolio only made of stocks, it will not incur a management fee. If the account has been inactive for 90 days, there is a maintenance fee and account termination fee. You can get an afternoon trading window and set automated trading rules with M1 Plus offered for $125 annually.
Microsoft Corporation is a technology company that is listed under NASDAQ with the ticker MSFT. It develops, manufactures, and sells cloud systems, computer software, computing devices, electronics, and other products. It was founded by Bill Gates and Paul Allen on April 4, 1975, in Redmond, Washington. The biggest shareholder of Microsoft is Satya Nadella who has also served as a chief executive officer since 2014.
Microsoft is one of the third most valuable companies in the world and it focuses largely on cloud computing. Its most popular products include the Microsoft surface computers and Xbox video game consoles. In 2019, it became the third U.S. company to be valued worth more than $1 trillion. The company has been dominating the computer landscape for many decades. It owns the popular professional networking site Linkedin, as well as GitHub and Skype.
Microsoft price history
Microsoft has grown significantly over the years and the best way to make the most of the growth is to invest in an IPO. The stock debuted on March 13, 1986, at $21 and is now available on April 1, 2021, for $241.45. If you had invested $1,000 in Microsoft in the IPO, you would have received 34 shares and today it would be worth a whopping $2,357,700.25, according to the calculator on the company’s website. It includes the split adjustments.
Microsoft split stock in 1987, 1990, 1991, 1992, 1994, 1996, 1998, 1999, and 2003.
Microsoft dividend information
Microsoft has consistently paid cash dividends over the years. It is considered a dividend aristocrat and is the first choice of investors who are looking to generate passive income through dividends. It recently paid a quarterly dividend of $0.56 per share. It has a dividend yield of 0.9% and an annualized dividend of $2.24.
Best features of Microsoft stock
Microsoft earned more than $15.5 billion in net income for the quarter ended December 2020. This is a 33% increase over the previous year. The revenue of the company for the year was a whopping $43.1 billion and the EPS (earnings per share) stood at $2.03. The company has a P/E Ratio (price to earnings) of $36.01. It continues growing in terms of clients, revenue, and market share, and has paid quarterly dividends since 2012. Microsoft has enjoyed free cash flow for many years, which has made it possible to pay out regular dividends. The company has split stock in the past and there is no guarantee it will happen in the future. In case of a stock split, your investment will increase in terms of value and holding.
Microsoft products are geared towards businesses and consumers. It has a wide range of products that meet the needs of various industries and it competes against some of the top tech companies in the world. One of the oldest tech companies, Microsoft enjoys a high market cap and valuation which attracts investors.
Due to the pandemic, there is a surge on demand for video game consoles and personal computer systems. This has led – and continues to lead – to a rise in sales and revenue on Xbox.
Microsoft also transitioned its Office platform to a subscription service and it has worked well for the software business. It has more than 47.5 million subscribers to Microsoft 365.
The company experienced acceleration in growth in Azure and the revenue increased by 48%. The demand for cloud infrastructure is higher than ever and Microsoft is looking to make the most of it.
Microsoft is well-positioned in the industry and continues to bring stiff competition to its competitors, such as Apple. It continues to expand the footprint globally and has announced new data centers across Latin America, Asia, and Europe. Since it has enough liquidity on hand, it can grow and innovate.
Step 3: Open an account & buy Microsoft shares
Ready to purchase some shares? Then it's time to open an online brokerage account. Using the best broker accounts, you can enjoy low-cost purchases and quick execution. I'll show you how easy it is using M1 Finance as an example.
Head to the M1 Finance website and click on Get started.
You will have to provide an email address and password and then you will be asked to verify your email to begin. Once you are in, you create your pie. Choose any three stocks from the hundreds of stocks and your pie will be ready. You can also choose more.
Next you will be asked for an investment horizon. You can choose short, average, or long. Now choose the type of investment account you want and fund it. (You can connect it to a bank account instantly.) You can begin your investment journey after linking the bank account.
After choosing the best stockbrokers, you need to decide the price at which you want to buy the stock. There are two options- market price and limit price. If you buy the stock at the current share price, it is at the market price and when you set a limit for the purchase price, it is known as a limit price. Once you select your option and hit purchase, you are now the proud owner of shares in Microsoft.
How much were Microsoft shares when the company first went public?
Microsoft's stock price was $21 when it first went public in 1986 through an IPO.
How much does it cost to buy Microsoft shares today?
As of closing on April 1, 2021, Microsoft shares cost $241.45.
Does Microsoft pay dividends?
Microsoft pays a cash dividend and is a dividend aristocrat.
What is the minimum number of Microsoft shares that I can buy?
You can purchase one share or a fractional share if you use the right brokerage.
The bottom line
If you are looking for growth stocks to buy and hold forever, Microsoft enjoys a strong reputation in the industry.
Using online brokerage accounts like Robinhood, Stash, or M1 Finance, you can enter the world of the stock market. You can also get expert investment advice for a fee. No matter the number of shares you choose to invest in, remember that the market is volatile. It will have ups and downs but you need to identify your risk appetite and take the right step. Remember that you could make money and lose money. Volatility is a common factor in the stock market and it could be profitable as well as risky. Identify your risk appetite and long-term goals before investing.