This puts Satya Nadella in the top 20% of approval ratings compared to other CEOs of publicly-traded companies. The company is scheduled to release its next quarterly earnings announcement on Tuesday, October 24th 2023. Click the link below and we’ll send you MarketBeat’s list of the 10 best stocks to own in 2023 and why they should be in your portfolio. MarketRank is calculated as an average of available category scores, with extra weight given to analysis and valuation. Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
The company has raised its cash payout a dozen times since initiating a dividend in 2004, and its shares currently yield a respectable 1.5%. With dividend payments accounting for only about 40% of its free cash flow, investors can expect more dividend increases in the years ahead. It enjoys significant https://bigbostrade.com/ exposure to the rapidly growing cloud computing, gaming, and artificial intelligence markets. It has a 40% plus-operating margin, indicative of its focus on controlling costs. Finally, even in a tough quarter, Microsoft returned $9.7 billion to shareholders through dividends and share repurchases.
- Growth traders and investors will tend to look for growth rates of 20% or higher.
- The Projected Sales Growth (F1/F0) looks at the estimated growth rate for the current year.
- That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.
- The Motley Fool has positions in and recommends Garmin, Microsoft, and Zoom Video Communications.
Additionally, Microsoft believes that organizations are currently optimizing their Azure projects and may start new projects in the next few quarters, thereby boosting demand for its cloud services. Perhaps the most surprising result in Microsoft’s productivity and business products division was that LinkedIn’s revenue grew by 26%. The professional networking platform’s sales are primarily driven by premium subscriptions and advertising, which shouldn’t be as strong during difficult economic periods. Nevertheless, its strength last quarter reflects LinkedIn’s relevance in the advertising space, and its results shouldn’t be ignored. Finally, commercial Office (9%) and Dynamics (19%) products saw solid growth, which is impressive when many businesses cut spending. On the other hand, earnings estimate revisions are at the core of the Zacks Rank.
The tech giant looks attractive as a long-term investment.
The most impressive performance was in net income margins, which increased from 15% to 37% between 2018 and 2022. It’s worth pointing out that Microsoft’s fiscal year ends in June, so these year-end 2022 numbers are four months old. Microsoft’s stock valuation has jumped in 2023, but it still isn’t as expensive as it was during the crazy-growth days in late 2021.
You may also track its financials over each quarter or year to decide if it’s using its financial resources wisely. It’s hard to find any flaws in Microsoft’s latest earnings report. However, the stock still trades at 32 times forward earnings, which is arguably a high multiple for a company that is expected to generate mid-teens percentage earnings growth for the foreseeable future.
Once you have deposited money in the account (often by linking to a bank account), you can begin to buy stock. Do you have three to six months of living expenses set aside for an emergency? Do you have any high-interest debt, such as credit card debt, you’re trying to pay off? If you’ve checked the boxes above, you may be ready for the next step. Even so, revisiting a company with fresh eyes as a potential investor can help you evaluate whether, how much and when to invest. Many or all of the products featured here are from our partners who compensate us.
Now, the question of whether you should buy Microsoft stock comes down to whether you believe in the staying power of its transformation. Microsoft has so far used its advantage in the market to introduce AI upgrades across its product lineup. Office programs like Excel and Word now offer AI features, while its search engine, Bing, has ChatGPT-like capabilities.
Should I invest in Microsoft?
We have lifted our fair value estimate for Microsoft stock to $360 per share from $325, and continue to view the shares as attractive. The stock trades at a forward P/E of 29, a premium to the market, but that could be deserved. Microsoft’s growth outlook is greater than the market’s historical average.
We may receive payment from our affiliates for featured placement of their products or services. We may also receive payment if you click on certain links posted on our site. Microsoft’s mt4 account most recent dividend payout was on 13 September 2023. The latest dividend was paid out to all shareholders who bought their shares by 15 August 2023 (the “ex-dividend date”).
It takes the consensus estimate for the current fiscal year (F1) divided by the EPS for the last completed fiscal year (F0) (actual if reported, the consensus if not). A higher number means the company has more debt to equity, whereas a lower number means it has less debt to equity. A D/E ratio of 1 means its debt is equivalent to its common equity.
Is It Too Late to Buy Microsoft Stock?
The content provided has not taken into account the particular circumstances of any specific individual or group of individuals and does not constitute personal advice or a personal recommendation. No content should be relied upon as constituting personal advice or a personal recommendation, when making your decisions. If you require any personal advice or recommendations, please speak to an independent qualified financial adviser.
Thoughtful investing involves diversification and proper asset allocation. As a general rule of thumb, individual stocks should make up no more than 10% of your financial portfolio. Its search and news advertising revenue rose 32% after excluding traffic acquisition costs.
In contrast, the net income that goes into the earnings portion of the P/E ratio does not add these in, thus artificially reducing the income and skewing the P/E ratio. Our testing substantiates this with the optimum range for price performance between 0-20. Cautious investors might want to wait before buying the stock at this elevated valuation, especially given the prospects for weak growth in key areas like Windows software and PC hardware. But, if you’re a more growth-focused investor, the stock still might look attractive thanks to Microsoft’s exposure to so many positive long-term software trends, especially AI. The company is highly profitable and generates mountains of cash, too.
It’s not often you can marry growth and value with the same company, but that’s exactly what investors can do with biotech stock Exelixis. Additionally, Exelixis’ robust cash position ($1.8 billion in cash, cash equivalents, and restricted cash) and healthy operating cash flow have allowed it to reignite its internal research engine. This includes advancing internally developed compounds into phase 1 studies, as well as signing collaboration agreements to potentially expand its cancer-drug pipeline. Plus, Microsoft ranked first on IBD’s 2021 list of ESG stocks for investors investors focused on environmental, social and governance issues. Microsoft announced a deal to buy Activision in January 2022 for $68.7 billion in cash.
In limited-license cannabis markets, regulators purposely limit how many dispensary licenses are issued in total, as well as to a single business. For a smaller player like Jushi, this competitive protection ensures it’ll have a fair shot to build up its brand(s) and garner a loyal following in these core markets. In relative terms, Jushi is a small fry, with only 26 operating dispensaries at the moment. Comparatively, a handful of MSOs have in the neighborhood of (or more than) 100 open locations. Its management team favors methodical expansion in core markets.
Microsoft’s Cloud Computing Business is Highly Formidable
For example, a cash/price ratio, or cash yield, of .08 suggests an 8% return or 8 cents for every $1 of investment. Under Nadella, Microsoft has become a company with growing revenue sources that offset the declining market for Windows (though even that could change as the Internet of Things grows). People who buy Microsoft stock get shares in a business that has built some certainty into its model, more like a cable or phone company, than a technology one. Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. With offerings like Windows, Office, and Microsoft 365, the company became a crucial part of the success of countless businesses around the globe.
Azure is well-positioned to capture a significant share of this growing opportunity. In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
In other words, if an app or site uses ChatGPT or any other OpenAI technology, Azure is the cloud platform underneath it. That’s huge, considering ChatGPT alone has roughly 100 million users today. Share prices are up 35% since January, largely on investor excitement over artificial intelligence and OpenAI’s ChatGPT, which Microsoft is partnered with.
About Microsoft (NASDAQ:MSFT) Stock
The acquisition also added a valuable network of more than 575 million LinkedIn members to Microsoft’s overall user base. Microsoft’s stock has more than tripled in value since Satya Nadella took over as CEO on Feb. 4, 2014. Yet even more impressive than these gains is the manner in which Nadella has positioned Microsoft to compete and win in a mobile- and cloud-based world.