I think Microsoft (MSFT) is one of the best value stocks available because it is growing and making more money.
For example, Microsoft’s Total Assets grew from $335.418 billion on 30 September 2021 to $359.784 billion on 30 September 2022. Similarly, Microsoft’s quarterly revenues grew from $45.317 billion on 30 September 2021 to $50.122 billion on 30 September 2022.
Impressively, Stockrow credits Microsoft (NASDAQ: MSFT) with seven quarters of double-digit revenue growth in the past 16 months. For example, Microsoft had a revenue growth rate of 20.09% in the quarter ending on 30 September 2021. The revenue growth rate fell to 10.6% in the quarter ending on 30 September 2022.
How much money is Microsoft making?
Microsoft Inc. (MSFT) is making more money. For instance, Microsoft’s quarterly gross profit grew from $31.671 billion on 30 September 2021 to $34.67 billion on 30 September 2022.
Similarly, Microsoft’s quarterly operating income grew from $20.238 billion on 30 September 2021 to $21.518 billion on 30 September 2022. However, Microsoft’s quarterly operating income fell from $22.247 billion on 31 December 2021.
However, Microsoft’s quarterly operating cash flow fell from $24.54 billion on 30 September 2021 to $23.198 billion on 30 September 2022. In contrast, Microsoft’s quarterly ending cash flow rose from $19.165 billion on 30 September 2021 to $22.884 billion on 30 September 2022.
Conversely, Microsoft finished the last fiscal year with less cash. Microsoft’s cash and short-term investments fell from $130.616 billion on 30 September 2021 to $107.262 on 30 September 2022. Microsoft can generate and keep enormous amounts of cash.
How Much Debt does Microsoft Have?
Microsoft Inc. (NASDAQ: MSFT) has less cash because it paid off an enormous amount of debt over the past year.
For example, Microsoft’s Total debt fell from $78.935 billion on 30 September 2021 and $80.353 billion on 31 December 2021 to $48.662 billion on 30 September 2022.
Thus, I calculate Microsoft paid off $31.731 in debt in the first nine months of 2022. Moreover, Microsoft paid off that debt when interest rates are rising. That is a smart move.
Paying off that debt is expensive. Microsoft reported a quarterly financing cash flow that fell from -$16.276 billion on 30 September 2021 to -$10.883 billion on 30 September 2022. The quarterly financing cash flow rose to -$17.345 billion on 31 March 2022.
Microsoft is a Cash-Rich Company with shrinking debts
Consequently, Microsoft (MSFT) is a cash-rich company with shrinking debts. Therefore, I consider Microsoft a value investment even at the $221.39 Mr. Market paid for it on 4 November 2022.
Appealingly Microsoft is a cash-rich value investment that pays a dividend. Microsoft has scheduled nine 68₵ quarterly dividends between 8 December 2022 and 9 December 2024. Consequently, Microsoft’s shares offered a $2.72 forward dividend and a 1.23% forward dividend yield on 4 November 2022.
If you want a value investment that grows and pays a dividend. Microsoft is worth examining. Yet, Microsoft’s value goes beyond cash, growth, and dividends.
What Value does Microsoft Have?
Microsoft (MSFT) offers value because of the widespread and growing popularity of its products.
For example, the number Microsoft Teams daily active users (DAU) grew from two million in 2017 and eight million in 2018 to 75 million in 2020, 145 million in 2021, and 270 million in October 2022, Statista estimates. Thus, Microsoft’s communication and collaboration platform grew by 200 million DAU in two years.
Moreover, Office 365, the Cloud Version of Microsoft Office, had 345 million paid users in April 2022, Office365Pros estimates. Office365Pros estimates Microsoft’s annual cloud revenues at $93.6 billion in April 2022. Plus, Microsoft’s Azure Active Directory had 550 million daily active users in January 2022, up from 425 million DAU in January 2021, Office365 Pros estimates.
Impressively, Statista estimates, Microsoft’s Azure captured 21% of the cloud infrastructure services market in the first quarter of 2022. Statista claims Microsoft’s Azure revenue grew by 40% in the quarter ending on 31 March 2022. Statista estimates Microsoft’s intelligent cloud revenue was $21 billion in that quarter.
Moreover, Statista claims 45% of organizations were running significant workloads on Azure in June 2022. Plus around 27% of Financial Operations were using Azure as a cloud services provider in June 2022.
Microsoft in the Cloud
Microsoft Azure was the world’s second-largest cloud service provider in June 2022, Dgtlinfra estimates. Azure is available in more areas than Amazon Web Services (AWS). Microsoft Azure was available in 60 regions and 116 zones, DgtIlinfra estimates. Conversely, AWS was available in just 26 regions and 84 zones.
Microsoft Azure operates over 200 physical data centers worldwide. Additionally, Microsoft Azure operates over 175,000 of fiber optic lines in 140 countries. Dglinfra estimates Microsoft’s cloud revenues at $23.4 billion for the quarter ending on 31 March 2022. Microsoft’s cloud revenues grew by 32% between March 2021 and March 2022.
I think Microsoft is a growing value investment because of its growing cloud infrastructure. Value investors seeking a growing cash-rich divided stock need to investigate Microsoft (MSFT).