Is NASDAQ:MSFT suited for dividend investing?

Take a closer look at MICROSOFT CORP (NASDAQ:MSFT), a stock of interest to dividend investors uncovered by our stock screener. NASDAQ:MSFT excels in fundamentals and provides a decent dividend, all while maintaining a reasonable valuation. Let's break it down further.

Dividend Analysis for NASDAQ:MSFT

ChartMill provides a Dividend Rating for every stock, ranging from 0 to 10. This rating assesses various dividend aspects, including yield, growth, and sustainability. NASDAQ:MSFT earns a 7 out of 10:

• MSFT's Dividend Yield is rather good when compared to the industry average which is at 11.43. MSFT pays more dividend than 91.97% of the companies 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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
• 24.66% of the earnings are spent on dividend by MSFT. This is a low number and sustainable payout ratio.
• MSFT's earnings are growing more than its dividend. This makes the dividend growth sustainable.

What does the Health looks like for NASDAQ:MSFT

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:MSFT has earned a 8 out of 10:

• An Altman-Z score of 9.72 indicates that MSFT is not in any danger for bankruptcy at the moment.
• MSFT's Altman-Z score of 9.72 is amongst the best of the industry. MSFT outperforms 85.40% of its industry peers.
• The Debt to FCF ratio of MSFT is 1.25, which is an excellent value as it means it would take MSFT, only 1.25 years of fcf income to pay off all of its debts.
• The Debt to FCF ratio of MSFT (1.25) is better than 74.09% of its industry peers.
• MSFT has a Debt/Equity ratio of 0.33. 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 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:

• With an excellent Return On Assets value of 17.80%, MSFT belongs to the best of the industry, outperforming 96.72% of the companies in the same industry.
• MSFT has a better Return On Equity (34.04%) than 95.26% of its industry peers.
• The Return On Invested Capital of MSFT (22.99%) is better than 97.81% of its industry peers.
• MSFT had an Average Return On Invested Capital over the past 3 years of 24.79%. This is significantly above the industry average of 10.37%.
• With an excellent Profit Margin value of 36.43%, MSFT belongs to the best of the industry, outperforming 96.72% of the companies in the same industry.
• MSFT's Profit Margin has improved in the last couple of years.
• MSFT has a Operating Margin of 44.70%. 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.

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

For an up to date full fundamental analysis you can check the fundamental report of MSFT

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.