Exploring NASDAQ:MSFT's dividend characteristics.

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 Analysis for NASDAQ:MSFT

ChartMill assigns a Dividend Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing various dividend elements, such as yield, historical performance, dividend growth, and sustainability. NASDAQ:MSFT has been awarded a 7 for its dividend quality:

• Compared to an average industry Dividend Yield of 2.70, MSFT pays a better dividend. On top of this MSFT pays more dividend than 90.48% of the companies listed in the same industry.
• On average, the dividend of MSFT grows each year by 10.00%, 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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
• 27.36% of the earnings are spent on dividend by MSFT. This is a low number and sustainable payout ratio.
• The dividend of MSFT is growing, but earnings are growing more, so the dividend growth is sustainable.

Analyzing Health Metrics

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:MSFT scores a 8 out of 10:

• An Altman-Z score of 8.79 indicates that MSFT is not in any danger for bankruptcy at the moment.
• MSFT has a Altman-Z score of 8.79. This is amongst the best in the industry. MSFT outperforms 87.55% of its industry peers.
• The Debt to FCF ratio of MSFT is 1.08, which is an excellent value as it means it would take MSFT, only 1.08 years of fcf income to pay off all of its debts.
• MSFT's Debt to FCF ratio of 1.08 is fine compared to the rest of the industry. MSFT outperforms 78.02% of its industry peers.
• A Debt/Equity ratio of 0.28 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.

A Closer Look at Profitability for NASDAQ:MSFT

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:MSFT scores a 8 out of 10:

• MSFT's Return On Assets of 17.56% is amongst the best of the industry. MSFT outperforms 98.53% of its industry peers.
• MSFT's Return On Equity of 35.09% is amongst the best of the industry. MSFT outperforms 97.07% of its industry peers.
• The Return On Invested Capital of MSFT (24.46%) is better than 98.17% of its industry peers.
• The Average Return On Invested Capital over the past 3 years for MSFT is significantly above the industry average of 10.78%.
• Looking at the Profit Margin, with a value of 34.15%, MSFT belongs to the top of the industry, outperforming 97.80% of the companies in the same industry.
• In the last couple of years the Profit Margin of MSFT has grown nicely.
• With an excellent Operating Margin value of 42.33%, MSFT belongs to the best of the industry, outperforming 99.63% of the companies in the same industry.
• In the last couple of years the Operating Margin of MSFT has grown nicely.

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

Check the latest full fundamental report of MSFT for a complete fundamental analysis.

Keep in mind

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.