Why NASDAQ:MSFT qualifies as a good dividend investing stock.

MICROSOFT CORP (NASDAQ:MSFT) is a hidden gem unveiled by our stock screening tool, featuring a promising dividend outlook alongside solid fundamentals. NASDAQ:MSFT demonstrates decent financial health and profitability while ensuring a sustainable dividend. Let's break it down further.

Dividend Examination 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 11.29. MSFT pays more dividend than 92.11% of the companies in the same industry.
• The dividend of MSFT is nicely growing with an annual growth rate of 10.00%!
• 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.
• 25.12% 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.

Health Examination for NASDAQ:MSFT

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:MSFT was assigned a score of 8 for health:

• MSFT has an Altman-Z score of 9.66. This indicates that MSFT is financially healthy and has little risk of bankruptcy at the moment.
• MSFT's Altman-Z score of 9.66 is amongst the best of the industry. MSFT outperforms 84.95% of its industry peers.
• The Debt to FCF ratio of MSFT is 1.40, which is an excellent value as it means it would take MSFT, only 1.40 years of fcf income to pay off all of its debts.
• With a decent Debt to FCF ratio value of 1.40, MSFT is doing good in the industry, outperforming 75.99% of the companies in the same industry.
• MSFT has a Debt/Equity ratio of 0.38. This is a healthy value indicating a solid balance between debt and equity.
• Although MSFT does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
• 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

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 has a Return On Assets of 17.54%. This is amongst the best in the industry. MSFT outperforms 97.13% of its industry peers.
• MSFT's Return On Equity of 34.64% is amongst the best of the industry. MSFT outperforms 95.70% of its industry peers.
• The Return On Invested Capital of MSFT (22.41%) is better than 97.49% 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 10.18%.
• Looking at the Profit Margin, with a value of 36.27%, MSFT belongs to the top of the industry, outperforming 97.49% of the companies in the same industry.
• In the last couple of years the Profit Margin of MSFT has grown nicely.
• MSFT has a Operating Margin of 44.17%. This is amongst the best in 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.

Keep in mind

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.