HP vs Microsoft

HP Inc. and Microsoft Corporation are two giants in the technology industry, each with a long history of success and innovation. Both companies have seen significant growth in their stock prices over the years, fueled by their leadership positions in their respective markets. While HP is known for its hardware products such as laptops and printers, Microsoft is a powerhouse in software development with products like Windows and Office. Investors often weigh the strengths and weaknesses of these two tech giants when considering their stock performance.

HP or Microsoft?

When comparing HP 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 HP 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. HP has a dividend yield of 3.73%, while Microsoft has a dividend yield of 0.72%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. HP reports a 5-year dividend growth of 12.96% year and a payout ratio of 37.71%. 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 HP P/E ratio at 12.73 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. HP P/B ratio is -26.00 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, HP has seen a 5-year revenue growth of 0.50%, while Microsoft's is 0.99%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with HP's ROE at -226.67% and Microsoft's ROE at 35.95%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $36.84 for HP and $415.26 for Microsoft. Over the past year, HP's prices ranged from $25.67 to $39.52, with a yearly change of 53.95%. 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.