Balancing Dividends and Fundamentals: The Case of NASDAQ:MSFT.

Unearth the potential of MICROSOFT CORP (NASDAQ:MSFT) as a dividend stock recommended by our stock screening tool. NASDAQ:MSFT maintains a robust financial footing and delivers a sustainable dividend. We'll delve into the details below.

How We Gauge Dividend for NASDAQ:MSFT

ChartMill employs its own Dividend Rating system for all stocks. This score, on a scale of 0 to 10, is determined by evaluating different dividend factors, such as yield, historical performance, dividend growth, and sustainability. NASDAQ:MSFT has been assigned a 7 for dividend:

• MSFT's Dividend Yield is rather good when compared to the industry average which is at 11.64. MSFT pays more dividend than 91.40% of the companies in the same industry.
• The dividend of MSFT is nicely growing with an annual growth rate of 10.19%!
• 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.
• MSFT pays out 24.63% of its income as dividend. This is a sustainable payout ratio.
• The dividend of MSFT is growing, but earnings are growing more, so the dividend growth is sustainable.

Health Analysis 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:

• MSFT has an Altman-Z score of 9.92. This indicates that MSFT is financially healthy and has little risk of bankruptcy at the moment.
• MSFT has a better Altman-Z score (9.92) than 80.65% of its industry peers.
• The Debt to FCF ratio of MSFT is 1.05, which is an excellent value as it means it would take MSFT, only 1.05 years of fcf income to pay off all of its debts.
• Looking at the Debt to FCF ratio, with a value of 1.05, MSFT is in the better half of the industry, outperforming 71.68% of the companies in the same industry.
• MSFT has a Debt/Equity ratio of 0.25. This is a healthy value indicating a solid balance between debt and equity.
• 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.

What does the Profitability looks like for NASDAQ:MSFT

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:MSFT, the assigned 8 is a significant indicator of profitability:

• MSFT's Return On Assets of 17.31% is amongst the best of the industry. MSFT outperforms 93.19% of its industry peers.
• MSFT's Return On Equity of 31.46% is amongst the best of the industry. MSFT outperforms 91.40% of its industry peers.
• The Return On Invested Capital of MSFT (22.57%) is better than 94.62% of its industry peers.
• Measured over the past 3 years, the Average Return On Invested Capital for MSFT is significantly above the industry average of 12.12%.
• The Profit Margin of MSFT (35.61%) is better than 95.34% of its industry peers.
• MSFT's Profit Margin has improved in the last couple of years.
• Looking at the Operating Margin, with a value of 44.49%, MSFT belongs to the top of the industry, outperforming 99.28% of the companies in the same industry.
• MSFT's Operating Margin has improved in the last couple of years.

Every day, new Best Dividend stocks can be found on ChartMill in our Best Dividend screener.

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

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.