ASML vs Microsoft

ASML and Microsoft are two prominent companies that operate in different sectors of the technology industry. ASML is a semiconductor equipment manufacturer that specializes in producing lithography machines used in chip manufacturing, while Microsoft is a software and technology giant known for its popular Windows operating system and Office productivity suite. Both companies have seen significant growth in their stock values in recent years, making them attractive investment options for those interested in the technology sector. In this comparison, we will analyze the financial performance and market outlook of ASML vs Microsoft stocks.

ASML or Microsoft?

When comparing ASML 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 ASML 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. ASML has a dividend yield of 0.9%, while Microsoft has a dividend yield of 0.72%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. ASML reports a 5-year dividend growth of 29.40% year and a payout ratio of 35.60%. On the other hand, Microsoft reports a 5-year dividend growth of 10.16% year and a payout ratio of 24.70%.

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 ASML P/E ratio at 39.13 and Microsoft's P/E ratio at 35.31. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. ASML P/B ratio is 17.93 while Microsoft's P/B ratio is 11.59.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, ASML has seen a 5-year revenue growth of 1.72%, while Microsoft's is 0.99%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with ASML's ROE at 49.99% and Microsoft's ROE at 35.95%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $717.50 for ASML and $415.26 for Microsoft. Over the past year, ASML's prices ranged from $573.86 to $1110.09, with a yearly change of 93.44%. Microsoft's prices fluctuated between $324.39 and $468.35, with a yearly change of 44.38%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.