This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Microsoft Is a Must-Have for Your Portfolio

Stocks in this article: MSFT AMZN YHOO RACK HPQ IBM GE

NEW YORK ( TheStreet) -- Strange looks and "Oh, OK" are typically the responses I receive when I tell people that Microsoft (MSFT - Get Report) and General Electric (GE) are the stocks they should buy.

When people ask me for stock tips, I know that most of the time they're thinking of companies that will make them a lot of money quickly.

But they should be thinking instead about stocks that will deliver a better-than-average return with the least amount of risk.

If your eyes aren't sore from staring at charts and Securities and Exchange Commission filings all day, leave the home runs to the traders who can get in and out of securities before you even hear about the news.

Some stocks are natural fits for long-term investors who seek to build real wealth over time. As a rule, this means dividend-paying stocks that dominate their space and don't have issues on their balance sheets or income statements.

I've touted the virtues of Microsoft (MSFT - Get Report) for more than a year, but the company remains a strong buy. You may think of "Mr. Softee" as little more than the maker of Windows, but that's a mistake. Microsoft's Azure is also one of the biggest players in cloud computing.

Microsoft maybe the largest player by revenue when you consider that Amazon.com (AMZN), Google (GOOG), Rackspace (RACK), IBM ( IBM), Hewlett-Packard (HPQ) and others are all paying Microsoft for every Windows-based server they host.

From my experience, Azure was much easier and straightforward to set up than Amazon's AWS. Both are priced about the same, giving Microsoft the edge due to a smaller learning curve. Cloud computing isn't where the real money is, not yet at least. And business software, Microsoft's cash cow, has proven it can compete against free software relatively easy.

MSFT Operating Income Annual Chart MSFT Operating Income Annual data by YCharts

The market reacted positively to the announcement of CEO Steve Ballmer stepping down even though operating profits have climbed at a rapid pace since Ballmer took over in 2000. The company has the resources to hire the very best talent, and you can expect another pop higher in shares once the replacement is announced.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,652.56 -20.04 -0.11%
S&P 500 2,054.08 +2.26 0.11%
NASDAQ 4,763.6890 +5.81 0.12%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs