4. Microsoft (MSFT) sells software, including the Windows operating system and Office product suite.
12-Month Sales Growth: 17%
12-Month Net Income Growth: 50%
Quarterly Operating Profit Margin: 44%
Cash Flow Multiple: 8.9 (53% peer discount)
Analysts' Median Target: $32.99
3-Year Dividend Growth: 10%
Dividend Yield: 2.3%
Payout Ratio: 24%
2011 Catalyst: Microsoft is one of the most compelling value stocks in the market. It has the strongest brand name in software, lofty margins, with a gross spread of 85%, and an obscene coffer for acquisitions. The Redmond, Wash.-based company held $44 billion of cash and equivalents at its fiscal first-quarter's end and less than $11 billion of debt, for a net liquidity position of $34 billion, plenty for acquisitions.Its quarterly return on equity rose to 44%, more than doubling the industry average. Return on assets hit 23%, indicating superlative efficiency. Despite such attractive metrics, Microsoft sells for just 10-times forward earnings, a 59% industry discount. Bullish Scenario: Stifel Nicolaus projects a $40 share price, implying 46% upside. Bearish Scenario: FBR Capital Markets expects Microsoft's stock to rise marginally to $28.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV