Why the dividend investor may take a look at NASDAQ:MSFT.

Last update: Sep 11, 2024

Our stock screener has singled out MICROSOFT CORP (NASDAQ:MSFT) as a promising choice for dividend investors. NASDAQ:MSFT not only scores well in profitability, solvency, and liquidity but also offers a decent dividend. We'll explore this further.

Understanding NASDAQ:MSFT's Dividend

ChartMill assigns a Dividend Rating to every stock. This score ranges from 0 to 10 and evaluates the different dividend aspects, including the yield, the growth and sustainability. NASDAQ:MSFT scores a 7 out of 10:

MSFT's Dividend Yield is rather good when compared to the industry average which is at 12.34. MSFT pays more dividend than 92.58% of the companies in the same industry.
On average, the dividend of MSFT grows each year by 10.19%, which is quite nice.
MSFT has been paying a dividend for at least 10 years, so it has a reliable track record.
MSFT has not decreased their dividend for at least 10 years, which is a reliable track record.
24.70% of the earnings are spent on dividend by MSFT. This is a low number and sustainable payout ratio.
MSFT's earnings are growing more than its dividend. This makes the dividend growth sustainable.

How do we evaluate the Health for NASDAQ:MSFT?

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:MSFT has earned a 8 out of 10:

An Altman-Z score of 9.32 indicates that MSFT is not in any danger for bankruptcy at the moment.
The Altman-Z score of MSFT (9.32) is better than 84.45% of its industry peers.
MSFT has a debt to FCF ratio of 1.06. This is a very positive value and a sign of high solvency as it would only need 1.06 years to pay back of all of its debts.
MSFT has a better Debt to FCF ratio (1.06) than 73.50% of its industry peers.
A Debt/Equity ratio of 0.28 indicates that MSFT is not too dependend on debt financing.
Even though the debt/equity ratio score it not favorable for MSFT, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
MSFT does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Profitability Examination for NASDAQ:MSFT

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:MSFT has achieved a 8:

MSFT has a better Return On Assets (17.21%) than 95.41% of its industry peers.
MSFT's Return On Equity of 32.83% is amongst the best of the industry. MSFT outperforms 92.93% of its industry peers.
Looking at the Return On Invested Capital, with a value of 22.63%, MSFT belongs to the top of the industry, outperforming 96.82% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for MSFT is significantly above the industry average of 10.30%.
MSFT's Profit Margin of 35.96% is amongst the best of the industry. MSFT outperforms 96.11% of its industry peers.
In the last couple of years the Profit Margin of MSFT has grown nicely.
MSFT's Operating Margin of 44.64% is amongst the best of the industry. MSFT outperforms 100.00% of its industry peers.
In the last couple of years the Operating Margin of MSFT has grown nicely.

More Best Dividend stocks can be found in our Best Dividend screener.

Our latest full fundamental report of MSFT contains the most current fundamental analsysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.