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Microsoft (NASDAQ:MSFT) shares have dropped from about $31 in September to just over $26 today. That's a pretty large decline for such a major "blue chip". Investors have been dumping stocks in the PC sector due to concerns that tablets like the iPad are taking over and also because recent product introductions from Microsoft have been lackluster. A few weeks ago, Microsoft launched the latest version of its operating system, "Windows 8", and it also released the "Surface" tablet. Now that these products have been on the market for awhile, it's easy to see that demand is disappointing some investors. Industry players have been vocal about the lackluster demand for both products and that makes it easy to sell the stock in the short-term and few upside catalysts appear likely anytime soon.

However, this could be a buying opportunity to buy Microsoft at a cheap price. Here are 5 reasons to consider buying the stock on dips now:

1. The valuation is cheap. Microsoft trades for just about 9 times earnings while the average stock in the S&P 500 Index (NYSEARCA:SPY) trades for about 14 times. It's not always easy to buy a blue chip stock at such a discount to the market, especially one that has continued to endure over decades and even dominate in the tech sector.

2. There could be a management shakeup at Microsoft in the future. The current CEO, Steve Ballmer has been in this position for years, but the stock has been stagnant for quite awhile. CEO's that can't budge the needle in the stock price often don't get to keep their positions, especially on the heels of two major product launches that have failed to excite customers and investors. CNBC's Herb Greenberg is one of a number of investors and analysts who believe a new CEO could be in the works in the near future. That type of change could create an upside catalyst for the stock.

3. Microsoft has a very strong balance sheet and history of paying and increasing the dividend. The current yield is about 3.5% which beats many other investment yields including some bonds. Furthermore, this company has been raising the dividend rather aggressively over the years and that trend appears likely to continue. About 5 years ago, the quarterly dividend was just 11 cents per share, but it has since doubled to 23 cents per share. With a balance sheet that has about $66 billion in cash and just $12.4 billion in debt, the company has the flexibility to keep raising the dividend in the future.

4. While most consumers and many investors think of the Windows when they think of Microsoft, the company also has growth potential from the successful Xbox video gaming system and the Internet phone service, "Skype" which now has hundreds of millions of users. With tens of billions in cash, Microsoft can afford to invest in research and development or buy the next "hot" start-up. This means that investors who are too focused on the short-term disappointments of Windows 8 and the Surface tablet might be missing out on a chance to buy a cheap stock for the long-term.

5. While people might not be waiting in line for the latest version of Windows 8, it is still selling in significant quantities. In fact, on January 8, a Barron's article reported that Microsoft has sold about 60 million licenses for Windows 8 since the software was released on October 26th. That is in-line with sales volumes for when Windows 7 was released a few years ago. While that not be indicating growth, it is still indicating that Windows is not going away, and plenty of revenues are coming into Microsoft.

Key Data Points For Microsoft From Yahoo Finance:
Current Share Price: $26.42
52-Week Range: $26.26 to $32.95
Dividend: 92 cents per share which yields 3.5%
2012 Earnings Estimate: $2.88 per share
2013 Earnings Estimate: $3.21 per share
P/E Ratio: about 9 times earnings

Data is sourced from Yahoo Finance. No guarantees or representations are made. Please consult a financial advisor before making investments.

Source: 5 Reasons Why Microsoft Shares Should Be On Your Buy List