3 months Premium FREE
No credit card. No commitment.
Microsoft Corporation
🇺🇸 MSFT · NYSE/NASDAQ · US5949181045
Technology
USD 387.38 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
23.1
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 387.38 ÷ 16.79 = 23.1
TTM period through: 2026-03-31
Forward P/E (estimated): 19.8
Based on analyst estimates
Reference: Provider P/E (Trailing): 23.3
Net Debt/EBITDA (TTM)
-0.1x
Latest quarter: -0.4x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-03-31
Latest quarter (2026-03-31): -0.4x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
ROE
34.0%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
14.2x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Dividend Summary
Powered by EODHDDividend Yield (Fwd)
0.94%
TTM: 0.93%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Forward Yield (estimated): 0.94%
Trailing Yield (TTM, last 12 months): 0.93%
Payout Ratio (Fwd)
21.7%
TTM: 20.6%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (Fwd): 21.7%
Payout (TTM): 20.6%
Cash Flow Payout (TTM): 15.2%
FCF Coverage (TTM): 2.82x
Growth Streak
8 yrs
Consec. increases
Div. Growth (5Y)
10.2%
Dividend History
EODHD Dividends API| Status | Type | Decl. Date | Ex-Div Date | Pay Date | Currency | Amount |
|---|---|---|---|---|---|---|
| Forecast* | Quarterly | — | 21 May 2027 | — | USD | 0.91 |
| Forecast* | Quarterly | — | 19 Feb 2027 | — | USD | 0.91 |
| Forecast* | Quarterly | — | 20 Nov 2026 | — | USD | 0.91 |
| Declared | Quarterly | 10 Jun 2026 | 20 Aug 2026 | 10 Sep 2026 | USD | 0.91 |
| Paid | Quarterly | 10 Mar 2026 | 21 May 2026 | 11 Jun 2026 | USD | 0.91 |
| Paid | Quarterly | 02 Dec 2025 | 19 Feb 2026 | 12 Mar 2026 | USD | 0.91 |
| Paid | Quarterly | 15 Sep 2025 | 20 Nov 2025 | 11 Dec 2025 | USD | 0.91 |
| Paid | Quarterly | 10 Jun 2025 | 21 Aug 2025 | 11 Sep 2025 | USD | 0.83 |
* Extrapolated from past dividend history. Not an official announcement — treat as an estimate, not a confirmed date or amount.
Summary
Microsoft is an exceptional enterprise business with massive cash generation, but its 0.93% dividend yield and elevated 23.1x P/E make it fundamentally unsuitable for this conservative income strategy. Despite a recently announced 7.1% dividend raise, the combination of extremely low yield, premium valuation, and significant structural regulatory headwinds places this firmly in the BELOW THRESHOLD quadrant. Better income opportunities exist in traditional essential service sectors with higher immediate yields.
Sector Context
Microsoft is a global technology dominant player that develops mission-critical software, cloud infrastructure (Azure), and AI solutions for enterprise and consumer markets. While its B2B software ecosystem acts as an essential utility for modern businesses, the sector's high-growth valuations and characteristically low dividend yields make it structurally difficult to fit into conservative income portfolios.
📊 Strategy Analysis
- • Exceptional balance sheet with Net Debt/EBITDA of -0.11x and massive free cash flow generation of $15.8 billion.
- • Announced a 7.1% upcoming dividend raise to $3.64, backed by a very safe payout ratio of 21.2% and FCF coverage of 2.82x.
- • Dominant B2B technology ecosystem providing essential, mission-critical software services with highly predictable recurring revenue.
⚠ What to Watch
- • Current dividend yield of 0.93% falls drastically below the strategy's strict 3.0% minimum requirement for income generation.
- • Valuation remains elevated at a TTM P/E of 23.1x, significantly exceeding the targeted 8-15x value range for conservative dividend investing.
- • Faces massive structural liabilities and regulatory headwinds, including an unresolved $28.9 billion IRS back tax demand and mandatory European software unbundling.
- • Structural shift toward highly capital-intensive AI infrastructure is pressuring historic software margins and increasing reliance on third-party intellectual property.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-07-04
Disclaimer: This information is for educational purposes only. Not financial advice.