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Amazon.com, Inc. (AMZN) vs Microsoft Corporation (MSFT)

Amazon.com, Inc. is a Consumer Cyclical company (Internet Retail); Microsoft Corporation is in Technology (Software Infrastructure). Microsoft Corporation is the larger, with a market value of $3.93T against $2.79T — 1.4× the size. Amazon.com, Inc. trades at the lower P/E: 20.2× against 29.6×. Microsoft Corporation grew revenue faster over the last twelve months: 17.8% against 15.8%. Microsoft Corporation has the higher net margin (40.3% vs 17.4%) and the higher return on invested capital (23.9% vs 10.5%). Across the 21 metrics below, Microsoft Corporation leads on 13 and Amazon.com, Inc. on 8.

Valuation

Metric AMZN MSFT
P/E 20.17 29.61
P/S 3.53 11.94
P/B 4.96 8.95
Price to free cash flow n/m 59.13
EV/EBITDA 16.23 20.25
EV/Sales 3.54 11.83
Earnings yield 4.96% 3.38%
Free cash flow yield (0.28%) 1.69%

Profitability

Metric AMZN MSFT
Gross margin 50.77% 67.94%
Operating margin 12.08% 46.78%
Net margin 17.44% 40.31%
Free cash flow margin (0.98%) 20.19%
Return on equity 30.56% 34.04%
Return on assets 15.22% 19.42%
Return on invested capital 10.51% 23.91%

Growth

Metric AMZN MSFT
Revenue growth (TTM) 15.77% 17.79%
EPS growth (last fiscal year) 29.66% 31.60%
Revenue growth, 5-year CAGR 13.18% 14.57%
Net income growth, 5-year CAGR 29.49% 16.90%

Health

Metric AMZN MSFT
Debt to equity 0.23 0.09
Current ratio 1.03 1.23
Net debt to EBITDA (0.39) (0.19)

Dividend

Metric AMZN MSFT
Dividend yield — 0.68%
Payout ratio — 0.20

Size

Metric AMZN MSFT
Market cap 2.79t 3.93t

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