Another Great Earnings Report for Microsoft Shareholders | ETF Trends

Microsoft announced earnings on Tuesday that beat expectations, reporting a revenue that was a 22% growth year-over-year and the fastest the company has grown since 2018, reported CNBC.

The company reported $45.32 billion in revenue compared to an expected $43.87 billion by analysts, and was buoyed by its Intelligent Cloud sector. The earnings equate to $2.27 adjusted per share compared to an expectation of $2.07.

The cloud portion of Microsoft’s business includes the Azure public cloud, GitHub, System Center, SQL Server, Visual Studio, Windows Server, and enterprise services, which collectively grew 31% year-over-year and brought in $16.96 billion in revenue. These cloud services grow 50% when comparing this most recent quarter to the same period last year, Microsoft said.

Looking forward, Microsoft Finance Chief Amy Hood said, “we expect healthy broad-based growth in our Azure consumption business consistent with recent trends and our user business, while continuing to benefit from Microsoft 365 momentum to see a moderation of growth rates given the size of the install base.”

Chip shortages could impact PC sales going forward, but the More Personal Computing sector of Microsoft, which includes devices, Windows, gaming, and search advertising brought in $13.31 billion in revenue, reflecting a growth of 12%.

“This is all about the cloud transformation,” Wedbush analyst Dan Ives told Yahoo Finance Live. “They’ve turned into a cloud behemoth at Microsoft. This is a $2 trillion market that’s still in the third inning of playing out. On a cloud transformation I think that’s how you get a stock with a four in front of it.”

Shares of Microsoft have climbed 39% this year compared to the 22% growth of the S&P 500 Index during 2021.

Bringing in the Microsoft Dividends With DIVS

For investors looking to capitalize on increasing dividend growth by outperforming companies, the SmartETFs Dividend Builder ETF (DIVS) is an excellent option for those seeking a moderate level of income from dividend-paying companies.

DIVS invests in publicly-traded, dividend-paying companies that the advisor anticipates will provide increasing dividend payments over a term of three to five years. A company is evaluated on its ability to provide consistent, real dividend growth (after inflation) by whether it can generate returns on capital.

The advisor seeks to invest in companies that have a minimum of 10% real cash flow on investment every year for the last 10 years and look to continue that trend going forward. This is only one of a multitude of criteria the advisor considers when investing, and not all companies invested in may meet this criteria.

DIVS is actively managed and holds roughly 35 equal-weighted positions. The fund invests in any cap in domestic and foreign markets, both developed and emerging, and is benchmarked to the MSCI World Index.

During adverse market conditions, the fund can take a temporary defensive position by investing in cash and cash equivalents.

Microsoft Corp (MSFT) is carried within the fund at a 3.44% weighting.

DIVS carries an expense ratio of 0.65%.

For more news, information, and strategy, visit the Dividend Channel.