Is NASDAQ:MSFT a Suitable Choice for Quality Investing?

In this article we will dive into MICROSOFT CORP (NASDAQ:MSFT) as a possible candidate for quality investing. Investors should always do their own research, but we noticed MICROSOFT CORP showing up in our Caviar Cruise quality screen, which makes it worth to investigate a bit more.

Why NASDAQ:MSFT may be interesting for quality investors.

• MICROSOFT CORP has demonstrated significant revenue growth over the past 5 years, with a 13.94% increase. This underscores the company's ability to adapt to market dynamics and capitalize on growth opportunities.
• With a robust ROIC excluding cash and goodwill at 56.1%, MICROSOFT CORP showcases its effective allocation of capital and operational excellence. This metric signifies the company's ability to generate attractive returns and supports its long-term financial performance.
• With a favorable Debt/Free Cash Flow Ratio of 1.25, MICROSOFT CORP showcases its sound financial discipline and cash flow management. This ratio indicates the company's ability to service its debt obligations while maintaining sufficient free cash flow for future investments or operational needs.
• MICROSOFT CORP exhibits impressive Profit Quality (5-year) with a 92.6% ratio, reflecting its consistent ability to generate high-quality profits. This metric underscores the company's strong financial performance and commitment to delivering sustainable earnings.
• MICROSOFT CORP has experienced impressive EBIT growth over the past 5 years, with 20.67% increase. This reflects the company's effective operational performance and highlights its potential for long-term financial success.
• With EBIT 5-year growth outpacing its Revenue 5-year growth, MICROSOFT CORP showcases its effective cost management and enhanced operational performance. This suggests the company's ability to generate higher earnings from its revenue streams.

Fundamental Analysis Observations

As part of its analysis, ChartMill provides a comprehensive Fundamental Rating for each stock. This rating, ranging from 0 to 10, is updated on a daily basis and is based on the evaluation of various fundamental indicators and properties.

Overall MSFT gets a fundamental rating of 7 out of 10. We evaluated MSFT against 276 industry peers in the Software industry. Both the health and profitability get an excellent rating, making MSFT a very profitable company, without any liquidiy or solvency issues. MSFT shows excellent growth, but is valued quite expensive already. Finally MSFT also has an excellent dividend rating. These ratings would make MSFT suitable for dividend and growth and quality investing!

For an up to date full fundamental analysis you can check the fundamental report of MSFT

More quality stocks can be found in our Caviar Cruise screen.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.