Amazon.com vs Microsoft Which Is More Profitable?

Amazon.com and Microsoft are two heavyweight tech giants that have been dominant players in the stock market for years. Both companies have seen exponential growth in their stock prices, driven by their innovation, strong financial performance, and market dominance. Amazon.com is known for its e-commerce empire and cloud computing services, while Microsoft is renowned for its software products and services. Investors often compare the two companies' stocks to determine which offers the best investment opportunity.

Amazon.com or Microsoft?

When comparing Amazon.com 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 Amazon.com 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. Amazon.com has a dividend yield of -%, while Microsoft has a dividend yield of 0.72%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Amazon.com reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. 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 Amazon.com P/E ratio at 43.56 and Microsoft's P/E ratio at 34.33. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Amazon.com P/B ratio is 8.38 while Microsoft's P/B ratio is 10.80.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Amazon.com has seen a 5-year revenue growth of 1.33%, while Microsoft's is 0.99%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Amazon.com's ROE at 21.82% and Microsoft's ROE at 34.56%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $205.59 for Amazon.com and $416.00 for Microsoft. Over the past year, Amazon.com's prices ranged from $139.52 to $212.25, with a yearly change of 52.13%. Microsoft's prices fluctuated between $362.90 and $468.35, with a yearly change of 29.06%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.