Why MICROSOFT CORP (NASDAQ:MSFT) provides a good dividend, while having solid fundamentals.

Discover MICROSOFT CORP (NASDAQ:MSFT)—a stock that our stock screener has recognized as a solid dividend pick with strong fundamentals. NASDAQ:MSFT showcases decent financial health and profitability while providing a sustainable dividend. We'll explore the specifics further.

Dividend Assessment of NASDAQ:MSFT

An integral part of ChartMill's stock analysis is the Dividend Rating, which spans from 0 to 10. This rating evaluates diverse dividend factors, including yield, historical data, growth, and sustainability. NASDAQ:MSFT has received a 7 out of 10:

• Compared to an average industry Dividend Yield of 13.08, MSFT pays a better dividend. On top of this MSFT pays more dividend than 91.64% of the companies listed in the same industry.
• On average, the dividend of MSFT grows each year by 10.19%, which is quite nice.
• MSFT has paid a dividend for at least 10 years, which is a reliable track record.
• MSFT has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
• MSFT pays out 24.68% of its income as dividend. This is a sustainable payout ratio.
• MSFT's earnings are growing more than its dividend. This makes the dividend growth sustainable.

Looking at the Health

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:MSFT has received a 8 out of 10:

• An Altman-Z score of 9.33 indicates that MSFT is not in any danger for bankruptcy at the moment.
• MSFT has a better Altman-Z score (9.33) than 82.18% of its industry peers.
• The Debt to FCF ratio of MSFT is 1.16, which is an excellent value as it means it would take MSFT, only 1.16 years of fcf income to pay off all of its debts.
• The Debt to FCF ratio of MSFT (1.16) is better than 69.45% of its industry peers.
• A Debt/Equity ratio of 0.24 indicates that MSFT is not too dependend on debt financing.
• 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 utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:MSFT has earned a 8 out of 10:

• Looking at the Return On Assets, with a value of 17.37%, MSFT belongs to the top of the industry, outperforming 93.82% of the companies in the same industry.
• With an excellent Return On Equity value of 30.64%, MSFT belongs to the best of the industry, outperforming 92.00% of the companies in the same industry.
• Looking at the Return On Invested Capital, with a value of 22.54%, MSFT belongs to the top of the industry, outperforming 96.00% 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 11.63%.
• MSFT has a Profit Margin of 35.43%. This is amongst the best in the industry. MSFT outperforms 96.00% of its industry peers.
• In the last couple of years the Profit Margin of MSFT has grown nicely.
• MSFT has a Operating Margin of 44.96%. This is amongst the best in the industry. MSFT outperforms 98.91% of its industry peers.
• MSFT's Operating Margin has improved in the last couple of years.

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.