For starters, let us look at the trend in revenue, net income and dividends for Microsoft and Apple Inc. (AAPL).
Look at Revenue
Microsoft has enjoyed a steady increase in its revenue, while Apple has seen its revenue surge. Which revenue growth is easier to manage? Microsoft has many revenue sources, while Apples revenue growth has generally been driven higher by the iPhone and iPad.
Look at Net Income
Until more recently Microsoft generated more net income than Apple. Which is easier to manage, a steady increase or hitting the jackpot?
Look at Dividends
Microsoft has steadily increased the cash payment (dividend) to owners. Apple has not paid a dividend recently, though one is expected to be paid soon. A dividend helps reduce the risk of stock ownership and provides a cash-flow.
Why do some think Microsoft has a lost decade?
The contraction of the price-earnings ratio from near 80x in 2000 to under 11x in 2012 that resulted in a lower stock price. In my opinion that is not an issue management can control.
Management has improved sales, net income and cash payment (dividend) to owners.
The stock price and market capitalization of Microsoft is below peak levels, while Apple is at or near peak levels. Time will tell what happens.
Microsoft has done an outstanding job increasing revenue, net income and dividends. The fundamentals of the business have been improving. Will this trend continue?
Time will tell. However, under the watch of Mr. Ballmer, Microsoft has generated impressive revenue and net income. Should the trend continue and investors pay up for earnings then the stock price might enjoy a double-barreled boost from higher earnings per share and a higher price-earnings ratio.
Alternatively, a steady increase in the dividend with the current level of interest rates might send the stock price higher or cushion any decline.
Disclosure: I am long MSFT.