Microsoft Corporation: 3 Charts To Put Its Valuation Into Perspective

Aug. 09, 2021 5:27 AM ETMicrosoft Corporation (MSFT)5 Comments

Summary

  • Microsoft Corporation is currently priced at ~32.8x FW PE and causes concerns for some investors.
  • This article examines the valuation from 3 different perspectives: dividend yield, dividend yield relative to risk-free rate, and historical PE.
  • Finally, based on these examinations, an assessment of future returns will be performed.

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Thesis and Background

Microsoft Corporation (NASDAQ:MSFT) is currently priced at ~32.8x FW PE and causes concerns for some investors. To put its valuation in perspective, this article examines the valuation from 3 different angles: dividend yield, dividend yield relative

This article was written by

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** Disclosure: I am associated with Sensor Unlimited.

** Master of Science, 2004, Stanford University, Stanford, CA 

Department of Management Science and Engineering, with concentration in quantitative investment 

** PhD,  2006, Stanford University, Stanford, CA 

Department of Mechanical Engineering, with concentration in  advanced and renewable energy solutions

** 15 years of investment management experiences 

Since 2006, have been actively analyzing stocks and the overall market, managing various portfolios and accounts and providing investment counseling to many relatives and friends.

** Diverse background and holistic approach 

Combined with Sensor Unlimited, we provide more than 3 decades of hands-on experience in high-tech R&D and consulting, housing market, credit market, and actual portfolio management. We monitor several asset classes for tactical opportunities. Examples include less-covered stocks ideas (such as our past holdings like CRUS and FL), the credit and REIT market, short-term and long-term bond trade opportunities, and gold-silver trade opportunities. 

I also take a holistic view and watch out on aspects (both dangers and opportunities) often neglected – such as tax considerations (always a large chunk of return), fitness with the rest of holdings (no holding is good or bad until it is examined under the context of what we already hold), and allocation across asset classes.

Above all, like many SA readers and writers, I am a curious investor – I look forward to constantly learn, re-learn, and de-learn with this wonderful community.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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