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Microsoft Corporation
🇺🇸 MSFT · NYSE/NASDAQ · US5949181045
Technology
USD 487.88 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
27.6
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: 487.88 ÷ 17.95 = 27.6
TTM period through: 2026-06-30
Forward P/E (estimated): 25.0
Based on analyst estimates
Reference: Provider P/E (Trailing): 27.6
Net Debt/EBITDA (TTM)
0.2x
Latest quarter: 1.0x
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: 2026-06-30
Latest quarter (2026-06-30): 1.0x
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
18.0x
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)
0.96%
TTM: 0.73%
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): 0.96%
Trailing Yield (TTM, last 12 months): 0.73%
Payout Ratio (Fwd)
20.3%
TTM: 19.8%
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): 20.3%
Payout (TTM): 19.8%
Cash Flow Payout (TTM): 14.5%
FCF Coverage (TTM): 2.53x
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 0.73% dividend yield and elevated 27.65x P/E make it fundamentally unsuitable for this conservative income strategy. The combination of structural regulatory risks, severe IRS tax liabilities, and a low-yield capital allocation model keeps it firmly outside our core dividend universe. Not recommended for new positions.
Sector Context
Operates in Technology (Software Infrastructure). While it is an elite, monopoly-like business, its high-growth, ultra-low-yield (0.73%) profile and massive AI capital intensity are fundamentally misaligned with an essential-service dividend compounding strategy.
📊 Strategy Analysis
- • Exceptional fundamental profitability with a 34.0% ROE and strong free cash flow generation.
- • Pristine balance sheet with a Net Debt/EBITDA of 0.25x and solid dividend coverage (FCF covers dividend 2.53x).
- • Recently announced a 7.1% dividend raise, reflecting consistent low-payout dividend growth (20.35% TTM payout ratio).
⚠ What to Watch
- • Current dividend yield of 0.73% falls drastically below strict income-generation thresholds.
- • Valuation remains highly elevated at a TTM P/E of 27.65x, 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 aggressive global antitrust probes.
- • Capital allocation fundamentally misaligned with pure DGI priorities, penalizing the business due to its high-growth, low-yield profile.
📊 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: 2026-08-15
Disclaimer: This information is for educational purposes only. Not financial advice.