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Microsoft

Nasdaq:MSFT
Snowflake Description

High growth potential established dividend payer.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
MSFT
Nasdaq
$816B
Market Cap
  1. Home
  2. US
  3. Software
Company description

Microsoft Corporation develops, licenses, and supports software products, services, and devices worldwide. The last earnings update was 22 days ago. More info.


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Value

 Is Microsoft undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Microsoft to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Microsoft.

NasdaqGS:MSFT Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 30 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 10.3%
Perpetual Growth Rate 10-Year US Government Bond Rate 3%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NasdaqGS:MSFT
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 3%
Equity Risk Premium S&P Global 7.1%
Software Unlevered Beta Simply Wall St/ S&P Global 0.96
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.958 (1 + (1- 21%) (10.67%))
1.039
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.04
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.95% + (1.039 * 7.05%)
10.28%

Discounted Cash Flow Calculation for NasdaqGS:MSFT using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Microsoft is arrived at by discounting future cash flows to their present value using the 2 stage method. We use analyst's estimates of cash flows going forward 5 years for the 1st stage, the 2nd stage assumes the company grows at a stable rate into perpetuity.

NasdaqGS:MSFT DCF 1st Stage: Next 5 year cash flow forecast
2018 2019 2020 2021 2022
Levered FCF (USD, Millions) 34,146.52 36,496.53 40,071.14 41,993.75 45,409.33
Source Analyst x19 Analyst x19 Analyst x15 Analyst x4 Analyst x3
Present Value
Discounted (@ 10.28%)
30,964.59 30,011.61 29,880.53 28,396.20 27,844.51
Present value of next 5 years cash flows $147,097
NasdaqGS:MSFT DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2022 × (1 + g) ÷ (Discount Rate – g)
= $45,409 × (1 + 2.95%) ÷ (10.28% – 2.95%)
$638,121
Present Value of Terminal Value = Terminal Value ÷ (1 + r)5
= $638,121 ÷ (1 + 10.28%)5
$391,289
NasdaqGS:MSFT Total Equity Value
Calculation Result
Total Equity Value = Present value of next 5 years cash flows + Terminal Value
= $147,097 + $391,289
$538,386
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $538,386 / 7,677
$70.13
NasdaqGS:MSFT Discount to Share Price
Calculation Result
Value per share (USD) From above. $70.13
Current discount Discount to share price of $106.27
= -1 x ($106.27 - $70.13) / $70.13
-51.5%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of Microsoft is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Microsoft's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Microsoft's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NasdaqGS:MSFT PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings () in USD $2.15
NasdaqGS:MSFT Share Price ** NasdaqGS (2018-07-20) in USD $106.27
United States of America Software Industry PE Ratio Median Figure of 159 Publicly-Listed Software Companies 39.11x
United States of America Market PE Ratio Median Figure of 7,819 Publicly-Listed Companies 18.37x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Microsoft.

NasdaqGS:MSFT PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NasdaqGS:MSFT Share Price ÷ EPS (both in USD)

= 106.27 ÷ 2.15

49.38x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Microsoft is overvalued based on earnings compared to the US Software industry average.
  • Microsoft is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does Microsoft's expected growth come at a high price?
Raw Data
NasdaqGS:MSFT PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 49.38x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 30 Analysts
20.7%per year
United States of America Software Industry PEG Ratio Median Figure of 125 Publicly-Listed Software Companies 2.21x
United States of America Market PEG Ratio Median Figure of 5,913 Publicly-Listed Companies 1.6x

*Line of best fit is calculated by linear regression .

NasdaqGS:MSFT PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 49.38x ÷ 20.7%

2.39x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Microsoft is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Microsoft's assets?
Raw Data
NasdaqGS:MSFT PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings () in USD $10.77
NasdaqGS:MSFT Share Price * NasdaqGS (2018-07-20) in USD $106.27
United States of America Software Industry PB Ratio Median Figure of 366 Publicly-Listed Software Companies 3.63x
United States of America Market PB Ratio Median Figure of 13,249 Publicly-Listed Companies 1.73x
NasdaqGS:MSFT PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NasdaqGS:MSFT Share Price ÷ Book Value per Share (both in USD)

= 106.27 ÷ 10.77

9.86x

* Primary Listing of Microsoft.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Microsoft is overvalued based on assets compared to the US Software industry average.
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Value checks
We assess Microsoft's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Software industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Software industry average (and greater than 0)? (1 check)
  5. Microsoft has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is Microsoft expected to perform in the next 1 to 3 years based on estimates from 30 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
20.7%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Microsoft expected to grow at an attractive rate?
  • Microsoft's earnings growth is expected to exceed the low risk savings rate of 3%.
Growth vs Market Checks
  • Microsoft's earnings growth is expected to exceed the United States of America market average.
  • Microsoft's revenue growth is expected to exceed the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NasdaqGS:MSFT Future Growth Rates Data Sources
Data Point Source Value (per year)
NasdaqGS:MSFT Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 30 Analysts 20.7%
NasdaqGS:MSFT Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 30 Analysts 9.6%
United States of America Software Industry Earnings Growth Rate Market Cap Weighted Average 23.1%
United States of America Software Industry Revenue Growth Rate Market Cap Weighted Average 10.2%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 12.3%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 6.2%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NasdaqGS:MSFT Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (3 weeks ago) See Below
Future Estimates Average of up to 30 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NasdaqGS:MSFT Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2023-06-30 182,584 75,735 50,739 3
2022-06-30 167,534 69,462 46,739 3
2021-06-30 151,933 63,990 44,133 9
2020-06-30 135,249 56,431 36,603 26
2019-06-30 122,577 50,535 32,596 30
NasdaqGS:MSFT Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2018-06-30 110,360 43,884 16,571
2018-03-31 99,259 43,471 11,482
2017-12-31 95,652 41,980 9,544
2017-09-30 92,560 40,398 22,113
2017-06-30 89,950 39,507 21,204
2017-03-31 91,580 36,966 20,542
2016-12-31 88,899 36,673 18,812
2016-09-30 86,869 35,998 17,563
2016-06-30 85,320 33,325 16,798
2016-03-31 86,886 31,710 10,481
2015-12-31 88,084 31,468 11,710
2015-09-30 90,758 30,190 12,555

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Microsoft's earnings are expected to grow significantly at over 20% yearly.
  • Microsoft's revenue is expected to grow by 9.6% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NasdaqGS:MSFT Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (3 weeks ago) See Below
Future Estimates Average of up to 30 Analyst Estimates (S&P Global) See Below

All data from Microsoft Company Filings, last reported 3 weeks ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:MSFT Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2023-06-30
2022-06-30
2021-06-30 5.86 6.36 5.59 4.00
2020-06-30 4.79 5.38 4.27 18.00
2019-06-30 4.23 4.38 3.98 18.00
NasdaqGS:MSFT Past Financials Data
Date (Data in USD Millions) EPS *
2018-06-30 2.15
2018-03-31 1.49
2017-12-31 1.24
2017-09-30 2.86
2017-06-30 2.74
2017-03-31 2.64
2016-12-31 2.41
2016-09-30 2.23
2016-06-30 2.12
2016-03-31 1.31
2015-12-31 1.46
2015-09-30 1.55

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Microsoft is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).
X
Future performance checks
We assess Microsoft's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Microsoft has a total score of 5/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Microsoft performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Microsoft's growth in the last year to its industry (Software).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Microsoft's year on year earnings growth rate was negative over the past 5 years and the most recent earnings are below average.
  • Microsoft's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Microsoft's 1-year earnings growth is negative, it can't be compared to the US Software industry average.
Earnings and Revenue History
Microsoft's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Microsoft Company Filings, last reported 3 weeks ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:MSFT Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2018-06-30 110,360.00 16,571.00 22,223.00 14,726.00
2018-03-31 99,259.00 11,482.00 21,917.00 14,307.00
2017-12-31 95,652.00 9,544.00 21,448.00 13,947.00
2017-09-30 92,560.00 22,113.00 20,735.00 13,505.00
2017-06-30 89,950.00 21,204.00 20,020.00 13,037.00
2017-03-31 91,580.00 20,542.00 19,594.00 12,669.00
2016-12-31 88,899.00 18,812.00 19,066.00 12,294.00
2016-09-30 86,869.00 17,563.00 19,106.00 12,132.00
2016-06-30 85,320.00 16,798.00 19,260.00 11,988.00
2016-03-31 86,886.00 10,481.00 19,194.00 11,936.00
2015-12-31 88,084.00 11,710.00 19,448.00 11,940.00
2015-09-30 90,758.00 12,555.00 19,862.00 11,943.00
2015-06-30 93,580.00 12,193.00 20,324.00 12,046.00
2015-03-31 94,782.00 20,000.00 21,108.00 12,075.00
2014-12-31 93,456.00 20,675.00 21,016.00 11,834.00
2014-09-30 91,505.00 21,370.00 21,084.00 11,679.00
2014-06-30 86,833.00 22,074.00 20,488.00 11,381.00
2014-03-31 83,347.00 22,427.00 19,909.00 11,041.00
2013-12-31 83,433.00 22,822.00 19,918.00 10,938.00
2013-09-30 80,370.00 22,641.00 19,903.00 10,718.00
2013-06-30 77,849.00 21,863.00 19,556.00 10,411.00
2013-03-31 76,012.00 16,406.00 19,171.00 10,222.00
2012-12-31 72,930.00 15,459.00 19,018.00 10,099.00
2012-09-30 72,359.00 15,706.00 18,435.00 9,942.00
2012-06-30 73,723.00 16,978.00 18,426.00 9,811.00
2012-03-31 73,031.00 23,344.00 18,604.00 9,610.00
2011-12-31 72,052.00 23,468.00 18,593.00 9,362.00
2011-09-30 71,120.00 23,478.00 18,481.00 9,176.00

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Microsoft has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).
  • Microsoft used its assets less efficiently than the US Software industry average last year based on Return on Assets.
  • Microsoft's use of capital has not improved over the past 3 years (Return on Capital Employed).
X
Past performance checks
We assess Microsoft's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Software industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Microsoft has a total score of 1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Microsoft's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Microsoft's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Microsoft is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Microsoft's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Microsoft's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 1.9x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Microsoft Company Filings, last reported 3 weeks ago.

NasdaqGS:MSFT Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2018-06-30 82,718.00 87,019.00 133,768.00
2018-03-31 79,239.00 88,621.00 132,273.00
2017-12-31 78,360.00 100,171.00 138,535.00
2017-09-30 89,647.00 95,971.00 133,611.00
2017-06-30 72,394.00 88,804.00 129,207.00
2017-03-31 69,729.00 85,995.00 121,576.00
2016-12-31 68,809.00 87,806.00 121,205.00
2016-09-30 70,372.00 75,932.00 136,789.00
2016-06-30 71,997.00 54,541.00 113,041.00
2016-03-31 74,806.00 46,767.00 105,338.00
2015-12-31 76,780.00 44,868.00 102,314.00
2015-09-30 77,445.00 38,721.00 99,277.00
2015-06-30 80,083.00 35,384.00 96,391.00
2015-03-31 90,132.00 31,964.00 95,288.00
2014-12-31 91,879.00 28,738.00 89,569.00
2014-09-30 90,170.00 23,911.00 88,721.00
2014-06-30 89,784.00 23,203.00 85,146.00
2014-03-31 87,424.00 23,473.00 87,674.00
2013-12-31 85,100.00 23,724.00 83,135.00
2013-09-30 81,641.00 16,525.00 79,934.00
2013-06-30 78,944.00 16,290.00 76,410.00
2013-03-31 76,688.00 14,765.00 73,788.00
2012-12-31 72,576.00 14,218.00 68,098.00
2012-09-30 68,836.00 12,374.00 66,072.00
2012-06-30 66,363.00 12,775.00 62,044.00
2012-03-31 68,659.00 13,148.00 58,348.00
2011-12-31 64,121.00 12,803.00 50,691.00
2011-09-30 59,391.00 13,097.00 55,939.00
  • Microsoft's level of debt (105.2%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (20.6% vs 105.2% today).
  • Debt is well covered by operating cash flow (50.4%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 47.7x coverage).
X
Financial health checks
We assess Microsoft's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Microsoft has a total score of 4/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Microsoft's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
1.58%
Current annual income from Microsoft dividends. Estimated to be 1.81% next year.
If you bought $2,000 of Microsoft shares you are expected to receive $32 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Microsoft's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.47%).
  • Microsoft's dividend is below the markets top 25% of dividend payers in United States of America (3.97%).
Upcoming dividend payment

Purchase Microsoft on or before the 'Buy Limit' to receive their next dividend payment.

Dividends are usually paid every 3 or 6 months, you can time your share purchase to take advantage of upcoming dividend payments.
Dividend payment calendar
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NasdaqGS:MSFT Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 30 Analyst Estimates (S&P Global) See Below
United States of America Software Industry Average Dividend Yield Market Cap Weighted Average of 83 Stocks 1.4%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 5868 Stocks 3%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.5%
United States of America Top 25% Dividend Yield 75th Percentile 4%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NasdaqGS:MSFT Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2023-06-30
2022-06-30 2.20 1.00
2021-06-30 2.05 7.00
2020-06-30 1.94 11.00
2019-06-30 1.81 12.00
NasdaqGS:MSFT Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2018-06-13 1.680 1.655
2018-03-13 1.680 1.764
2017-11-29 1.680 1.885
2017-09-19 1.680 2.118
2017-06-14 1.560 2.158
2017-03-14 1.560 2.310
2016-12-01 1.560 2.465
2016-09-20 1.560 2.651
2016-06-15 1.440 2.615
2016-03-15 1.440 2.739
2015-12-03 1.440 2.721
2015-09-15 1.440 2.912
2015-06-09 1.240 2.743
2015-03-11 1.240 2.788
2014-12-04 1.240 2.762
2014-09-16 1.240 2.654
2014-06-10 1.120 2.570
2014-03-11 1.120 2.803
2013-11-20 1.120 3.016
2013-09-17 1.120 3.214
2013-06-12 0.920 2.779
2013-03-11 0.920 2.943
2012-11-29 0.920 3.364
2012-09-18 0.920 3.193
2012-06-13 0.800 2.649
2012-03-13 0.800 2.593
2011-12-14 0.800 2.749
2011-09-20 0.800 3.075
2011-06-15 0.640 2.473
2011-03-14 0.640 2.545
2010-12-15 0.640 2.326
2010-09-21 0.640 2.484
2010-06-17 0.520 2.096
2010-03-09 0.520 1.818
2009-12-09 0.520 1.765
2009-09-18 0.520 1.887
2009-06-10 0.520 2.178
2009-03-09 0.520 2.706
2008-12-11 0.520 2.838
2008-09-22 0.520 2.363
2008-07-23 0.440 1.649

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been stable in the past 10 years.
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of Microsoft's earnings are paid to the shareholders as a dividend.
  • Dividends paid are covered by net profit (1.3x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by net profit (2.8x coverage).
X
Income/ dividend checks
We assess Microsoft's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Microsoft afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Microsoft has a total score of 5/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Microsoft's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Satya Nadella, image provided by Google.
Satya Nadella
COMPENSATION $20,014,152
AGE 51
TENURE AS CEO 4.4 years
CEO Bio

Mr. Satya Nadella is Chief Executive Officer and Director of Microsoft Corporation since February 2014. Before being named CEO in February 2014, he held leadership roles in both enterprise and consumer businesses across the Company. He has held various leadership positions at Microsoft since joining Microsoft in 1992, including Executive Vice President of Cloud and Enterprise from July 2013 to February 2014; President of Server and Tools from 2011 to 2013; Senior Vice President of Online Services Division from 2009 to 2011; and Senior Vice President of Search, Portal, and Advertising from 2008 to 2009. Mr. Nadella’s roles also included Vice President of the Microsoft Business Division. He has been a Director of Starbucks Corp since March 22, 2017. Before joining Microsoft, he was a Member of the Technology Staff at Sun Microsystems. He earned a bachelor’s degree in electrical engineering from Mangalore University, a master’s degree in computer science from the University of Wisconsin – Milwaukee and a master’s degree in business administration from the University of Chicago. He serves on the Board of Trustees to Fred Hutchinson Cancer Research Center. Mr. Nadella was on the Board of Directors of Riverbed Technology, Inc.

CEO Compensation
  • Satya's compensation has been consistent with company performance over the past year.
  • Satya's compensation appears reasonable for a company of this size and profit level.
Management Team Tenure

Average tenure and age of the Microsoft management team in years:

3.3
Average Tenure
57
Average Age
  • The tenure for the Microsoft management team is about average.
Management Team

Satya Nadella

TITLE
Chief Executive Officer & Director
COMPENSATION
$20M
AGE
51
TENURE
4.4 yrs

Brad Smith

TITLE
President & Chief Legal Officer
COMPENSATION
$10M
AGE
59
TENURE
2.8 yrs

Bill Gates

TITLE
Co-Founder
AGE
63

Amy Hood

TITLE
Executive VP & CFO
COMPENSATION
$12M
AGE
46
TENURE
5.2 yrs

Jean-Philippe Courtois

TITLE
Executive VP and President of Microsoft Global Sales
COMPENSATION
$18M
AGE
57
TENURE
2 yrs

Peggy Johnson

TITLE
Executive Vice President of Business Development
COMPENSATION
$7M
AGE
56
TENURE
3.8 yrs

Michael Beal

TITLE
GM and President of Belgium & Luxemburg

Frank Brod

TITLE
Corporate VP of Finance & Administration and Chief Accounting Officer
AGE
63

Kevin Scott

TITLE
Chief Technology Officer
TENURE
1.5 yrs

Vikas Mehta

TITLE
Director of Investor Relations
Board of Directors Tenure

Average tenure and age of the Microsoft board of directors in years:

4.2
Average Tenure
61
Average Age
  • The tenure for the Microsoft board of directors is about average.
Board of Directors

John Thompson

TITLE
Independent Chairman
COMPENSATION
$690K
AGE
69
TENURE
4.4 yrs

Satya Nadella

TITLE
Chief Executive Officer & Director
COMPENSATION
$20M
AGE
51
TENURE
4.4 yrs

Bill Gates

TITLE
Co-Founder
AGE
63
TENURE
37.5 yrs

Chuck Noski

TITLE
Director
COMPENSATION
$370K
AGE
65
TENURE
14.7 yrs

Helmut Gunter Panke

TITLE
Director
COMPENSATION
$360K
AGE
72
TENURE
14.7 yrs

John Stanton

TITLE
Independent Director
COMPENSATION
$340K
AGE
63
TENURE
4 yrs

Teri List-Stoll

TITLE
Director
COMPENSATION
$355K
AGE
55
TENURE
3.8 yrs

Charlie Scharf

TITLE
Director
COMPENSATION
$325K
AGE
53
TENURE
3.8 yrs

Sandi Peterson

TITLE
Director
COMPENSATION
$340K
AGE
59
TENURE
2.6 yrs

Padmasree Warrior

TITLE
Director
COMPENSATION
$325K
AGE
57
TENURE
2.6 yrs
Recent Insider Trading
  • Microsoft insiders have sold more shares than they have bought in the past 3 months.
Who owns this company?
X
Management checks
We assess Microsoft's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Microsoft has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

External News
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Simply Wall St News

Is Microsoft Corporation's (NASDAQ:MSFT) Balance Sheet Strong Enough To Weather A Storm?

its financial health remains the key to continued success. … Today we will look at Microsoft’s financial liquidity and debt levels, which are strong indicators for whether the company can weather economic downturns or fund strategic acquisitions for future growth. … Note that this commentary is very high-level and solely focused on financial health, so I suggest you dig deeper yourself

Simply Wall St -

What is Behind Microsoft Corporation's (NASDAQ:MSFT) Superior ROE?

and want to better understand how you can grow your money by investing in Microsoft Corporation (NASDAQ:MSFT). … Microsoft Corporation (NASDAQ:MSFT) performed in-line with its systems software industry on the basis of its ROE – producing a return of14.49% relative to the peer average of 13.11% over the past 12 months. … With more debt, MSFT can invest even more and earn more money, thus pushing up its returns.

Simply Wall St -

Is Microsoft Corporation (NASDAQ:MSFT) A Sell At Its Current PE Ratio?

and want to begin learning the link between Microsoft Corporation (NASDAQ:MSFT)’s fundamentals and stock market performance. … Microsoft Corporation (NASDAQ:MSFT) is trading with a trailing P/E of 66.1x, which is higher than the industry average of 38x. … While this makes MSFT appear like a stock to avoid or sell if you own it, you might change your mind after I explain the assumptions behind the P/E ratio

Simply Wall St -

Why I Like Microsoft Corporation (NASDAQ:MSFT)

Building up an investment case requires looking at a stock holistically. … Today I've chosen to put the spotlight on Microsoft Corporation (NASDAQ:MSFT) due to its excellent fundamentals in more than one area.

Simply Wall St -

Is Microsoft Corporation's (NASDAQ:MSFT) Future Growth Already Accounted For In Today's Price?

Microsoft Corporation (NASDAQ:MSFT) is considered a high growth stock. … However its last closing price of $101.05 left investors wondering whether this growth has already been factored into the share price. … The excitement around Microsoft's growth potential is not unfounded

Simply Wall St -

Should Microsoft Corporation (NASDAQ:MSFT) Be Part Of Your Portfolio?

Check out our latest analysis for Microsoft 5 questions I ask before picking a dividend stock When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas: Is their annual yield among the top 25% of dividend payers? … Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. … In terms of its peers, Microsoft generates a yield of 1.70%, which is high for Software stocks but still below the market's top dividend payers.Next Steps: With this in mind, I definitely rank Microsoft as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio.

Simply Wall St -

Microsoft Corporation (NASDAQ:MSFT): Ex-Dividend Is In 3 Days, Should You Buy?

Important news for shareholders and potential investors in Microsoft Corporation (NASDAQ:MSFT): The dividend payment of $0.42 per share will be distributed into shareholder on 14 June 2018, and the stock will begin trading ex-dividend at an earlier date, 16 May 2018. … View our latest analysis for Microsoft How I analyze a dividend stock When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas: Is their annual yield among the top 25% of dividend payers? … Relative to peers, Microsoft generates a yield of 1.72%, which is high for Software stocks but still below the market's top dividend payers.

Simply Wall St -

Did Microsoft Corporation (NASDAQ:MSFT) Create Value For Shareholders?

Return on Equity = Net Profit ÷ Shareholders Equity ROE is measured against cost of equity in order to determine the efficiency of Microsoft’s equity capital deployed. … ROE can be dissected into three distinct ratios: net profit margin, asset turnover, and financial leverage. … This is called the Dupont Formula: Dupont Formula ROE = profit margin × asset turnover × financial leverage ROE = (annual net profit ÷ sales) × (sales ÷ assets) × (assets ÷ shareholders’ equity) ROE = annual net profit ÷ shareholders’ equity NasdaqGS:MSFT Last Perf May 7th 18 The first component is profit margin, which measures how much of sales is retained after the company pays for all its expenses.

Simply Wall St -

What Does Microsoft Corporation's (NASDAQ:MSFT) Share Price Indicate?

Since Microsoft’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. … Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. … MSFT’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value.

Simply Wall St -

Microsoft Corporation's (NASDAQ:MSFT) Earnings Dropped -49.27%, Did Its Industry Show Weakness Too?

After looking at Microsoft Corporation's (NASDAQ:MSFT) latest earnings update (31 December 2017), I found it helpful to revisit the company's performance in the past couple of years and compare this against the latest numbers. … View our latest analysis for Microsoft Was MSFT's recent earnings decline worse than the long-term trend and the industry? … Scanning growth from a sector-level, the US software industry has been growing its average earnings by double-digit 11.76% in the past twelve months, and 14.16% over the past five years.

Simply Wall St -

Company Info

Map
Description

Microsoft Corporation develops, licenses, and supports software products, services, and devices worldwide. The company’s Productivity and Business Processes segment offers Office 365 commercial products and services for businesses, including Office, Exchange, SharePoint, Skype for Business, and related Client Access Licenses (CALs); Office 365 consumer services, such as Skype, Outlook.com, and OneDrive; Dynamics business solutions, such as financial management, enterprise resource planning, customer relationship management, supply chain management, and analytics applications for small and mid-size businesses, large organizations, and divisions of enterprises; and LinkedIn online professional network. Its Intelligent Cloud segment licenses server products and cloud services, such as Microsoft SQL Server, Windows Server, Visual Studio, System Center, and related CALs, as well as Azure, a cloud platform; and enterprise services, such as Premier Support and Microsoft Consulting that assist in developing, deploying, and managing Microsoft server and desktop solutions, as well as providing training and certification to developers and IT professionals on Microsoft products. The company’s More Personal Computing segment comprises Windows OEM, volume, and other non-volume licensing of the Windows operating system; patent licensing, Windows Internet of Things, MSN display advertising, and Windows Phone licensing system; devices, including Microsoft Surface, phones, and PC accessories; and search advertising, including Bing and Bing Ads. It also provides gaming platforms, including Xbox hardware, Xbox Live, video games, and third-party video games. The company markets and distributes its products through original equipment manufacturers, distributors, and resellers, as well as through online and Microsoft retail stores. It has a strategic partnership with CNH Industrial N.V. and BlackBerry Limited. The company was founded in 1975 and is headquartered in Redmond, Washington.

Details
Name: Microsoft Corporation
MSFT
Exchange: NasdaqGS
Founded: 1975
$815,834,790,000
7,677,000,000
Website: http://www.microsoft.com
Address: Microsoft Corporation
One Microsoft Way,
Redmond,
Washington, 98052,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS MSFT Common Stock Nasdaq Global Select US USD 13. Mar 1986
DB MSF Common Stock Deutsche Boerse AG DE EUR 13. Mar 1986
XTRA MSF Common Stock XETRA Trading Platform DE EUR 13. Mar 1986
SWX MSFT Common Stock SIX Swiss Exchange CH CHF 13. Mar 1986
SEHK 4338 Common Stock The Stock Exchange of Hong Kong Ltd. HK HKD 13. Mar 1986
ENXTBR MSF Common Stock Euronext Brussels BE USD 13. Mar 1986
WBAG MSFT Common Stock Wiener Boerse AG AT EUR 13. Mar 1986
SNSE MSFT Common Stock Santiago Stock Exchange CL USD 13. Mar 1986
BVC MSFT Common Stock Bolsa de Valores de Colombia CO COP 13. Mar 1986
BMV MSFT * Common Stock Bolsa Mexicana de Valores MX MXN 13. Mar 1986
BOVESPA MSFT34 BDR EACH REPR 1 COM SHS Bolsa de Valores de Sao Paulo BR BRL 21. Dec 2011
BASE MSFT CEDEARS EACH REP 1/5 ORD USD0.000025 Buenos Aires Stock Exchange AR ARS 22. Dec 1999
Number of employees
Current staff
Staff numbers
124,000
Microsoft employees.
Industry
Systems Software
Software
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2018/07/22 21:13
End of day share price update: 2018/07/20 00:00
Last estimates confirmation: 2018/07/21
Last earnings update: 2018/06/30
Last annual earnings update: 2018/06/30


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.