Microsoft vs Alibaba Which Is More Reliable?

Microsoft and Alibaba are two major players in the technology and e-commerce industries, each with its own strengths and weaknesses. Microsoft, a dominant force in the software and cloud computing sectors, has a long history of success and consistent growth. On the other hand, Alibaba, a powerhouse in the e-commerce industry, has rapidly expanded its reach and influence globally. Investors are closely monitoring these two stocks, weighing factors such as revenue growth, profitability, and market share to determine their investment potential.

Microsoft or Alibaba?

When comparing Microsoft and Alibaba, 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 Microsoft and Alibaba.

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. Microsoft has a dividend yield of 0.69%, while Alibaba has a dividend yield of 2.96%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Microsoft reports a 5-year dividend growth of 10.16% year and a payout ratio of 24.63%. On the other hand, Alibaba reports a 5-year dividend growth of 0.00% year and a payout ratio of 54.40%.

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 Microsoft P/E ratio at 36.92 and Alibaba's P/E ratio at 18.53. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Microsoft P/B ratio is 11.61 while Alibaba's P/B ratio is 1.68.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Microsoft has seen a 5-year revenue growth of 0.99%, while Alibaba's is 2.38%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Microsoft's ROE at 34.56% and Alibaba's ROE at 8.88%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $449.11 for Microsoft and $88.76 for Alibaba. Over the past year, Microsoft's prices ranged from $364.13 to $468.35, with a yearly change of 28.62%. Alibaba's prices fluctuated between $66.63 and $117.82, with a yearly change of 76.83%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.