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Why NASDAQ:MSFT provides a good dividend, while having solid fundamentals.

By Mill Chart

Last update: Apr 16, 2024

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.

Evaluating Dividend: NASDAQ:MSFT

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:

  • Compared to an average industry Dividend Yield of 11.06, MSFT pays a better dividend. On top of this MSFT pays more dividend than 91.64% of the companies listed in the same industry.
  • The dividend of MSFT is nicely growing with an annual growth rate of 10.00%!
  • 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 25.12% 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 Assessment of NASDAQ:MSFT

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 9.63 indicates that MSFT is not in any danger for bankruptcy at the moment.
  • The Altman-Z score of MSFT (9.63) is better than 87.64% 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 73.45% of the companies in the same industry.
  • A Debt/Equity ratio of 0.38 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.
  • The current and quick ratio evaluation for MSFT is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Understanding NASDAQ:MSFT's Profitability

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 (17.54%) than 97.09% of its industry peers.
  • With an excellent Return On Equity value of 34.64%, MSFT belongs to the best of the industry, outperforming 95.27% of the companies in the same industry.
  • Looking at the Return On Invested Capital, with a value of 22.41%, MSFT belongs to the top of the industry, outperforming 97.45% of the companies in the same industry.
  • The Average Return On Invested Capital over the past 3 years for MSFT is significantly above the industry average of 10.17%.
  • With an excellent Profit Margin value of 36.27%, MSFT belongs to the best of the industry, outperforming 96.36% of the companies in the same industry.
  • MSFT's Profit Margin has improved in the last couple of years.
  • The Operating Margin of MSFT (44.17%) is better than 100.00% of its industry peers.
  • 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.

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

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.

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MICROSOFT CORP

NASDAQ:MSFT (5/24/2024, 7:00:00 PM)

After market: 430.3 +0.14 (+0.03%)

430.16

+3.16 (+0.74%)

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