Microsoft vs Amazon.com Which Is More Promising?

Microsoft and Amazon.com are two titans of the technology industry, both dominating the market in their own ways. Microsoft, known for its software products and services, has shown steady growth and innovation over the years. On the other hand, Amazon.com, an e-commerce giant, has revolutionized online shopping and diversified its business into various sectors. Investors are constantly comparing the performance of these two stocks, each offering unique opportunities and challenges in the market.

Microsoft or Amazon.com?

When comparing Microsoft and Amazon.com, 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 Amazon.com.

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 0.72%, while Amazon.com has a dividend yield of -%. 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, Amazon.com reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

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 34.33 and Amazon.com's P/E ratio at 43.56. 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 10.80 while Amazon.com's P/B ratio is 8.38.

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 Amazon.com's is 1.33%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Microsoft's ROE at 34.56% and Amazon.com's ROE at 21.82%.

Retail Investors:

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