Microsoft Corporation (MSFT) vs Oracle Corporation (ORCL)

Microsoft Corporation and Oracle Corporation are both Software Infrastructure companies. Microsoft Corporation is the larger, with a market value of $3.68T against $423.0B — 8.7× the size. Oracle Corporation trades at the lower P/E: 21.2× against 28.7×. Oracle Corporation grew revenue faster over the last twelve months: 21.6% against 17.8%. Microsoft Corporation has the higher net margin (40.3% vs 26.1%) and the higher return on invested capital (23.9% vs 9.75%). Both pay a dividend; Oracle Corporation yields more (1.24% vs 0.71%). Across the 22 metrics below, Microsoft Corporation leads on 12 and Oracle Corporation on 10.

Valuation

Metric MSFT ORCL Software Infrastructure median
P/E 28.69 21.16 28.02
P/S 11.57 5.67 3.07
P/B 8.68 6.53 3.36
Price to free cash flow 57.31 n/m 17.12
EV/EBITDA 19.62 14.36 14.91
EV/Sales 11.46 6.79 3.03
Earnings yield 3.49% 4.73% 0.13%
Free cash flow yield 1.74% (7.06%) 1.15%

Profitability

Metric MSFT ORCL Software Infrastructure median
Gross margin 67.94% 63.96% 61.23%
Operating margin 46.78% 32.12% 0.00%
Net margin 40.31% 26.10% 0.00%
Free cash flow margin 20.19% (40.01%) 1.67%
Return on equity 34.04% 43.12% 0.59%
Return on assets 19.42% 7.75% 0.00%
Return on invested capital 23.91% 9.75% 0.00%

Growth

Metric MSFT ORCL Software Infrastructure median
Revenue growth (TTM) 17.79% 21.62% 13.41%
EPS growth (last fiscal year) 31.60% 34.33% —
Revenue growth, 5-year CAGR 14.57% 10.72% 15.81%
Net income growth, 5-year CAGR 16.90% 4.32% 0.00%

Health

Metric MSFT ORCL Software Infrastructure median
Debt to equity 0.09 1.75 0.06
Current ratio 1.23 1.17 1.55
Net debt to EBITDA (0.19) 3.03 0.08

Dividend

Metric MSFT ORCL Software Infrastructure median
Dividend yield 0.71% 1.24% 1.53%
Payout ratio 0.27 0.43 0.00

Size

Metric MSFT ORCL Software Infrastructure median
Market cap 3.68t 423.02b 835.96m

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