Nokia vs Microsoft Which Is a Smarter Choice?

Nokia and Microsoft are two prominent players in the technology industry, each with unique strengths and weaknesses. Nokia, a Finnish telecommunications company known for its mobile phones, and Microsoft, a multinational technology corporation famous for its software products, have both experienced fluctuations in their stock prices over the years. While Nokia has struggled to keep up with the competition in the smartphone market, Microsoft has diversified its portfolio to include cloud computing and other services. Investors should carefully consider the performance of these two stocks before making any investment decisions.

Nokia or Microsoft?

When comparing Nokia 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 Nokia 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. Nokia has a dividend yield of 3.61%, while Microsoft has a dividend yield of 0.72%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Nokia reports a 5-year dividend growth of 0.00% year and a payout ratio of 173.43%. On the other hand, Microsoft reports a 5-year dividend growth of 10.16% year and a payout ratio of 24.63%.

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 Nokia P/E ratio at 56.47 and Microsoft's P/E ratio at 34.33. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Nokia P/B ratio is 1.12 while Microsoft's P/B ratio is 10.80.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Nokia has seen a 5-year revenue growth of -0.02%, while Microsoft's is 0.99%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Nokia's ROE at 1.97% and Microsoft's ROE at 34.56%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $4.54 for Nokia and $416.00 for Microsoft. Over the past year, Nokia's prices ranged from $2.94 to $4.95, with a yearly change of 68.37%. Microsoft's prices fluctuated between $362.90 and $468.35, with a yearly change of 29.06%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.