Microsoft vs Teradata Which Is a Better Investment?

Microsoft and Teradata are two prominent players in the technology sector, each offering unique products and services to their customers. Both companies have seen significant growth in recent years, with their stocks consistently performing well in the market. While Microsoft is known for its diversified portfolio of software, hardware, and cloud services, Teradata specializes in data warehousing and analytics solutions. Investors looking to capitalize on the technology industry may find value in comparing and analyzing the stocks of these two industry giants.

Microsoft or Teradata?

When comparing Microsoft and Teradata, 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 Teradata.

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 Teradata 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, Teradata 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 36.41 and Teradata's P/E ratio at 38.10. 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 11.45 while Teradata's P/B ratio is 24.99.

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 Teradata's is 0.01%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Microsoft's ROE at 34.56% and Teradata's ROE at 84.54%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $441.60 for Microsoft and $31.97 for Teradata. Over the past year, Microsoft's prices ranged from $364.13 to $468.35, with a yearly change of 28.62%. Teradata's prices fluctuated between $24.02 and $49.44, with a yearly change of 105.83%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.