Microsoft (MSFT) is one of my favorite tech stocks because it generates enormous amounts of cash, keeps growing, and pays a dividend.
For instance, Microsoft Corp (NASDAQ: MSFT) reported a quarterly gross profit of $31.671 billion and a quarterly operating income of $20.238 billion on 30 September 2021. Those numbers rose from $26.152 billion and $15.876 billion on 30 September 2020.
Moreover, Microsoft’s quarterly revenues rose from $37.154 billion on 30 September 2020 to $45.317 billion on 30 September 2021. Impressively, Microsoft’s revenues grew by 21.97% in the quarter ending on 30 September 2021. The revenue growth rate rose from 21.35% in the quarter ending on 30 June 2021.
Moreover, Stockrow credits Microsoft with seven quarters of revenue growth between 31 March 2020 and 30 September 2021. Hence, Microsoft delivered seven straight quarters of revenue growth during a pandemic.
Microsoft Generates Enormous Amounts of Cash
Microsoft (NASDAQ: MSFT) reported a quarterly operating cash flow of $24.54 billion on 30 September 2021. The quarterly operating cash flow rose from $19.335 billion on 30 September 2020.
Additionally, Microsoft reported a quarterly ending cash flow of $19.165 billion on 30 September 2021. The quarterly ending cash flow rose from $17.205 billion on 30 September 2020.
Notably, Microsoft delivered those huge cash flows while paying enormous amounts of debt. To explain, Microsoft reported a quarterly financing cash flow of -$16.276 billion on 30 September 2021. The quarterly financing cash flow grew from -$10.289 billion on 30 September 2020.
Consequently, Microsoft’s total debt fell from $83.216 billion on 30 September 2020 to $78.935 billion a year later. In contrast, Microsoft’s cash and short-term investments fell from $137.977 billion on 30 September 2020 to $130.615 billion on 30 September 2021.
Therefore, Microsoft (MSFT) paid debts and accumulated $130.615 billion in cash during a pandemic. Hence, I consider Microsoft one of the best value investments in tech.
Microsoft added Enormous Value During the Pandemic
Similarly, Microsoft’s total assets grew from $304.337 billion on 30 September 2020 to $335.418 billion on 30 September 2021. Thus, Microsoft added enormous value during the pandemic.
The Microsoft Corp (MSFT) had a market capitalization of $2.525 trillion on 5 November 2021. In contrast, Tesla (TSLA) had a market cap of $1.227 trillion, and Amazon (AMZN) had a market cap of $1.784 trillion on the same day.
Yet, Mr. Market paid $336.06 for Microsoft, $1.222.09 for Tesla, and $3,518.99 for Amazon on 5 November 2021. Hence, Microsoft is worth more than Tesla or Amazon and its stock is far cheaper.
Additionally, Microsoft’s share value is growing. Mr. Market paid $202.33 for Microsoft on 2 November 2020 and $336.06 for MSFT on 5 November 2021.
Thus, I consider Microsoft a better value than the FAANG (Facebook, Amazon, Apple, Netflix, and Google) stocks. Furthermore I think Microsoft is an excellent value in Big Tech.
The Microsoft Dividend
Unlike Tesla, Amazon, and Alphabet (GOOGL), Microsoft (NASDAQ: MSFT) pays dividends.
In fact, Microsoft’s quarterly dividend will rise from 56¢ on 18 August 2021 to 62¢ on 17 November 2021. Furthermore, Microsoft has scheduled three 62¢ quarterly dividends for 2022.
Dividend.com estimates Microsoft shares offered a $2.48 forward dividend and a 0.74% dividend yield on 5 November 2021. Hence, I consider Microsoft a terrific dividend stock.
What Other Value does Microsoft Have?
I think Microsoft’s greatest value is Windows. Notably, Statcounter estimates Windows 10 had an 81.43% global market share in October 2021.
Moreover, Statista estimates four versions of Windows, 10, seven, 8.1 and eight, had a 99.17% of the global operating system market in September 2021. In detail, Statista estimates Windows 10 had a 79.84% share, Windows 7 had a 14.77% share, Windows 8.1 had a 3.36% share, and Windows 8 had a 1.16% share.
Additionally, Microsoft (MSFT) is a leader in gaming. For example, Statista estimates Xbox Live had 100 million Monthly Active Users in December 2020. Moreover, Statista estimates Xbox live added 35 million users in 2020. To elaborate, Statista estimates Xbox live had 65 million active users in the fourth quarter of 2019.
Thus, Microsoft is one of the most lucrative and fastest growing companies on Earth and it pays a dividend. If you want a widows and orphans stock in tech, I think Microsoft (MSFT) is an excellent choice. I predict Microsoft will grow, make money, and pay dividends for many years to come.
Originally published at https://marketmadhouse.com on November 5, 2021.
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