Alcoa vs Microsoft Which Is Superior?

Alcoa Corporation and Microsoft Corporation are both well-known companies in the stock market, but they operate in very different industries. Alcoa is a leading producer of aluminum, while Microsoft is a technology giant known for its software products and services. Investors looking to diversify their portfolios may consider comparing the performance of these two stocks. By analyzing factors such as revenue growth, profitability, and market trends, investors can make informed decisions about whether to invest in Alcoa or Microsoft.

Alcoa or Microsoft?

When comparing Alcoa and Microsoft, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Alcoa and Microsoft.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Alcoa has a dividend yield of 1.02%, while Microsoft has a dividend yield of 0.69%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Alcoa reports a 5-year dividend growth of 0.00% year and a payout ratio of -27.74%. On the other hand, Microsoft reports a 5-year dividend growth of 10.16% year and a payout ratio of 24.63%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Alcoa P/E ratio at -31.08 and Microsoft's P/E ratio at 36.73. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Alcoa P/B ratio is 1.73 while Microsoft's P/B ratio is 11.55.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Alcoa has seen a 5-year revenue growth of -0.18%, while Microsoft's is 0.99%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Alcoa's ROE at -6.71% and Microsoft's ROE at 34.56%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $38.51 for Alcoa and $445.58 for Microsoft. Over the past year, Alcoa's prices ranged from $24.86 to $47.77, with a yearly change of 92.16%. Microsoft's prices fluctuated between $366.28 and $468.35, with a yearly change of 27.87%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.