Should I buy Oracle shares after the company increased its quarterly dividend?

Oracle Corporation (NYSE: ORCL) reported solid fourth-quarter results this Monday, and the company’s shares advanced on a weekly basis.

Oracle increased its quarterly dividend by 18.5%, and Chief Executive Safra Catz said the company expects first-quarter revenue to grow between 20% and 22% from a year ago.

Oracle increased its quarterly dividend

Oracle Corporation is an American multinational computer technology corporation that sells software, cloud-engineered systems, and enterprise software products.

Oracle reported fourth-quarter results this Monday; total revenue has increased by 5.4% Y/Y to $11.84 billion, while the non-GAAP earnings per share were $1.54 (beats by $0.16). Safra Catz, Chief Executive Officer of Oracle, said:

What Q4 demonstrates is that our business is accelerating. A growing list of customers, many new to Oracle are choosing us for more products and services as they understand the benefits of Oracle technology.

Total cloud services and license support revenues grew 3% Y/Y to $7.61 billion, accounting for 64% of total company revenue. Cloud and on-premise licensing revenue have increased by 16% to $2.54 billion, while hardware sales declined by 3% to $856 million.

For the quarter, the gross margin for cloud services and license support was 82%, and the gross profit dollars grew 4%. Oracle will continue to invest in growth, and the company will continue to return value to its shareholders through technical innovation, strategic acquisitions, stock repurchases, prudent use of debt, and a dividend.

During the fourth quarter, Oracle repurchased 8 million shares for a total of $600 million, and it is important to mention that the company paid out dividends of $3.5 billion over the last 12 months.

Positive information is that the board of directors declared a $0.32/quarterly share dividend this week, which represents an increase of 18.5% compared with a prior dividend of $0.27. The dividend will be payable on July 26 to stockholders of record as of July 12, 2022.

Chief Executive Safra Catz said the company expects first-quarter revenue to grow between 20% and 22% from a year ago, while the earnings per share should be in a range of $1.09 to $1.13.

Fundamentally looking, Oracle trades at less than ten times TTM EBITDA, and with the market capitalization of $185 billion, shares of this company are reasonably valued.

$60 represents a strong support levelData source: tradingview.com

The strong support level stands at $60, while $75 represents the first resistance level. If the price falls below $60, it would be a “sell” signal, and we have the open way to $55 or even below.

On the other side, if the price jumps above $75, the next target could be at $80.

Summary

Oracle Corporation reported better than expected fourth-quarter results, and the company’s management announced a decision to increase the quarterly dividend. Oracle will continue to invest in growth, and Chief Executive Safra Catz said the company expects first-quarter revenue to grow between 20% and 22% from a year ago.

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