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杰力安心睡大觉

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- 杰力安心睡大觉杰力安心睡大觉
  ·03-04
  $Mapletree Log Tr(M44U.SI)$
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- 杰力安心睡大觉杰力安心睡大觉
  ·2022-11-11
  $DBS GROUP HOLDINGS LTD(D05.SI)$ today ex Dividend, but instead of minus 0.36 from yesterday closing price, the share price goes up! Thanks to US CPI result [Happy]
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- 杰力安心睡大觉杰力安心睡大觉
  ·2022-10-28
  $Meta Platforms, Inc.(META)$bbq
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- 杰力安心睡大觉杰力安心睡大觉
  ·2022-09-17
  Day Dalio forecast ..US central bank interest will keep increasing till above 4.5%
  Sorry, this post has been deleted
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- 杰力安心睡大觉杰力安心睡大觉
  ·2022-09-02
  $COMFORTDELGRO CORPORATION LTD(C52.SI)$ComfortDelGro dropped from Singapore's Straits Times Index (STI) and replaced by Philippine liquor company, Emperador. Funds tracking STI will be selling comfort, share price dropping...
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- 杰力安心睡大觉杰力安心睡大觉
  ·2022-07-04
  Don't panic my tiger friends, semiconductors is highly integrated to our life, time of matter to rebound after dust settled down.Back to fundamentals, calculate Intrinsic value ofyour desired semiconductor company. And when it is at great discount, personally I prefer at least 30% discount. Even better the share price is having 40% discount 50% discount...buy and patiently wait for rebound!
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- 杰力安心睡大觉杰力安心睡大觉
  ·2022-06-20
  $Meta Platforms, Inc.(META)$[Heartbreak] 💪🏻
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- 杰力安心睡大觉杰力安心睡大觉
  ·2022-05-20
  $NIO Inc.(NIO.SI)$First day listed in sgx market! Welcome nio!
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- 杰力安心睡大觉杰力安心睡大觉
  ·2022-05-04
  $Microsoft(MSFT)$key point! Stock are bought and sold based on expectations of corporate earnings!$Apple(AAPL)$$Tesla Motors(TSLA)$$NVIDIA Corp(NVDA)$
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- 杰力安心睡大觉杰力安心睡大觉
  ·2022-04-22
  One of the great analysis I ever read
  Amazon And Microsoft: The Better Buy Might Surprise You
  Viktor_Gladkov/iStock via Getty Images The surge in interest rates this year, triggered by the highe
  Amazon And Microsoft: The Better Buy Might Surprise You
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Tr(M44U.SI)$","images":[{"img":"https://community-static.tradeup.com/news/df6773ea2a7b899d8817644070800389","width":"1044","height":"1682"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/280537995132960","isVote":1,"tweetType":1,"viewCount":422,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":9960690320,"gmtCreate":1668132622760,"gmtModify":1676538018171,"author":{"id":"3561508330885091","authorId":"3561508330885091","name":"杰力安心睡大觉","avatar":"https://static.tigerbbs.com/479664bdd5087d57cfa715e187b1cc6d","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3561508330885091","authorIdStr":"3561508330885091"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/D05.SI\">$DBS GROUP HOLDINGS LTD(D05.SI)$&nbsp;</a>today ex Dividend, but instead of minus 0.36 from yesterday closing price, the share price goes up!&nbsp;Thanks to US CPI result&nbsp;[Happy]&nbsp;","listText":"<a href=\"https://ttm.financial/S/D05.SI\">$DBS GROUP HOLDINGS LTD(D05.SI)$&nbsp;</a>today ex Dividend, but instead of minus 0.36 from yesterday closing price, the share price goes up!&nbsp;Thanks to US CPI result&nbsp;[Happy]&nbsp;","text":"$DBS GROUP HOLDINGS LTD(D05.SI)$ today ex Dividend, but instead of minus 0.36 from yesterday closing price, the share price goes up! Thanks to US CPI result [Happy]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/9960690320","isVote":1,"tweetType":1,"viewCount":693,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9986861165,"gmtCreate":1666923483858,"gmtModify":1676537832131,"author":{"id":"3561508330885091","authorId":"3561508330885091","name":"杰力安心睡大觉","avatar":"https://static.tigerbbs.com/479664bdd5087d57cfa715e187b1cc6d","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3561508330885091","authorIdStr":"3561508330885091"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/META\">$Meta Platforms, Inc.(META)$</a>bbq","listText":"<a href=\"https://ttm.financial/S/META\">$Meta Platforms, Inc.(META)$</a>bbq","text":"$Meta Platforms, Inc.(META)$bbq","images":[{"img":"https://community-static.tradeup.com/news/ef7d8e34bcd13cbb77be787907dc4db5","width":"1242","height":"1968"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/9986861165","isVote":1,"tweetType":1,"viewCount":747,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":9937897223,"gmtCreate":1663388995862,"gmtModify":1676537264420,"author":{"id":"3561508330885091","authorId":"3561508330885091","name":"杰力安心睡大觉","avatar":"https://static.tigerbbs.com/479664bdd5087d57cfa715e187b1cc6d","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3561508330885091","authorIdStr":"3561508330885091"},"themes":[],"htmlText":"Day Dalio forecast ..US central bank interest will keep increasing till above&nbsp;4.5%","listText":"Day Dalio forecast ..US central bank interest will keep increasing till above&nbsp;4.5%","text":"Day Dalio forecast ..US central bank interest will keep increasing till above 4.5%","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9937897223","repostId":"663474135","repostType":1,"isVote":1,"tweetType":1,"viewCount":584,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9939802861,"gmtCreate":1662080962555,"gmtModify":1676536802570,"author":{"id":"3561508330885091","authorId":"3561508330885091","name":"杰力安心睡大觉","avatar":"https://static.tigerbbs.com/479664bdd5087d57cfa715e187b1cc6d","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3561508330885091","authorIdStr":"3561508330885091"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/C52.SI\">$COMFORTDELGRO CORPORATION LTD(C52.SI)$</a>ComfortDelGro&nbsp;dropped from Singapore's Straits Times Index (STI) and replaced by Philippine liquor company,&nbsp;Emperador. Funds tracking STI will be selling comfort, share price dropping...","listText":"<a href=\"https://ttm.financial/S/C52.SI\">$COMFORTDELGRO CORPORATION LTD(C52.SI)$</a>ComfortDelGro&nbsp;dropped from Singapore's Straits Times Index (STI) and replaced by Philippine liquor company,&nbsp;Emperador. Funds tracking STI will be selling comfort, share price dropping...","text":"$COMFORTDELGRO CORPORATION LTD(C52.SI)$ComfortDelGro dropped from Singapore's Straits Times Index (STI) and replaced by Philippine liquor company, Emperador. Funds tracking STI will be selling comfort, share price dropping...","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/9939802861","isVote":1,"tweetType":1,"viewCount":761,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9047167620,"gmtCreate":1656892435960,"gmtModify":1676535909604,"author":{"id":"3561508330885091","authorId":"3561508330885091","name":"杰力安心睡大觉","avatar":"https://static.tigerbbs.com/479664bdd5087d57cfa715e187b1cc6d","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3561508330885091","authorIdStr":"3561508330885091"},"themes":[],"htmlText":"Don't panic my tiger friends, semiconductors is highly integrated to our life, time of matter to&nbsp;rebound after dust settled down.Back to fundamentals, calculate&nbsp;Intrinsic value ofyour desired semiconductor company. And when it is at great discount, personally I prefer at least&nbsp;30% discount. Even better the share price is having&nbsp;40% discount&nbsp;50% discount...buy and patiently wait for rebound!","listText":"Don't panic my tiger friends, semiconductors is highly integrated to our life, time of matter to&nbsp;rebound after dust settled down.Back to fundamentals, calculate&nbsp;Intrinsic value ofyour desired semiconductor company. And when it is at great discount, personally I prefer at least&nbsp;30% discount. Even better the share price is having&nbsp;40% discount&nbsp;50% discount...buy and patiently wait for rebound!","text":"Don't panic my tiger friends, semiconductors is highly integrated to our life, time of matter to rebound after dust settled down.Back to fundamentals, calculate Intrinsic value ofyour desired semiconductor company. And when it is at great discount, personally I prefer at least 30% discount. Even better the share price is having 40% discount 50% discount...buy and patiently wait for rebound!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":15,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9047167620","isVote":1,"tweetType":1,"viewCount":668,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9040252145,"gmtCreate":1655682291588,"gmtModify":1676535682509,"author":{"id":"3561508330885091","authorId":"3561508330885091","name":"杰力安心睡大觉","avatar":"https://static.tigerbbs.com/479664bdd5087d57cfa715e187b1cc6d","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3561508330885091","authorIdStr":"3561508330885091"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/META\">$Meta Platforms, Inc.(META)$</a>[Heartbreak]&nbsp;💪🏻","listText":"<a href=\"https://ttm.financial/S/META\">$Meta Platforms, Inc.(META)$</a>[Heartbreak]&nbsp;💪🏻","text":"$Meta Platforms, Inc.(META)$[Heartbreak] 💪🏻","images":[{"img":"https://community-static.tradeup.com/news/9acbc5b1421d1d929d89e4368863efb1","width":"1242","height":"1968"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/9040252145","isVote":1,"tweetType":1,"viewCount":667,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":9021105432,"gmtCreate":1653009880526,"gmtModify":1676535207311,"author":{"id":"3561508330885091","authorId":"3561508330885091","name":"杰力安心睡大觉","avatar":"https://static.tigerbbs.com/479664bdd5087d57cfa715e187b1cc6d","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3561508330885091","authorIdStr":"3561508330885091"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/NIO.SI\">$NIO Inc.(NIO.SI)$</a>First day listed in sgx market! Welcome nio!&nbsp;","listText":"<a href=\"https://ttm.financial/S/NIO.SI\">$NIO Inc.(NIO.SI)$</a>First day listed in sgx market! Welcome nio!&nbsp;","text":"$NIO Inc.(NIO.SI)$First day listed in sgx market! Welcome nio!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9021105432","isVote":1,"tweetType":1,"viewCount":964,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9061240965,"gmtCreate":1651631964411,"gmtModify":1676534940075,"author":{"id":"3561508330885091","authorId":"3561508330885091","name":"杰力安心睡大觉","avatar":"https://static.tigerbbs.com/479664bdd5087d57cfa715e187b1cc6d","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3561508330885091","authorIdStr":"3561508330885091"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/MSFT\">$Microsoft(MSFT)$</a>key point!&nbsp;Stock are bought and sold based on expectations of corporate earnings!<a href=\"https://ttm.financial/S/AAPL\">$Apple(AAPL)$</a><a href=\"https://ttm.financial/S/TSLA\">$Tesla Motors(TSLA)$</a><a href=\"https://ttm.financial/S/NVDA\">$NVIDIA Corp(NVDA)$</a>","listText":"<a href=\"https://ttm.financial/S/MSFT\">$Microsoft(MSFT)$</a>key point!&nbsp;Stock are bought and sold based on expectations of corporate earnings!<a href=\"https://ttm.financial/S/AAPL\">$Apple(AAPL)$</a><a href=\"https://ttm.financial/S/TSLA\">$Tesla Motors(TSLA)$</a><a href=\"https://ttm.financial/S/NVDA\">$NVIDIA Corp(NVDA)$</a>","text":"$Microsoft(MSFT)$key point! Stock are bought and sold based on expectations of corporate earnings!$Apple(AAPL)$$Tesla Motors(TSLA)$$NVIDIA Corp(NVDA)$","images":[{"img":"https://community-static.tradeup.com/news/efa6c1857f12a0612ba195d5d00a69c3","width":"750","height":"983"}],"top":1,"highlighted":2,"essential":1,"paper":1,"likeSize":18,"commentSize":0,"repostSize":1,"link":"https://ttm.financial/post/9061240965","isVote":1,"tweetType":1,"viewCount":1247,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":9082564553,"gmtCreate":1650586296470,"gmtModify":1676534757602,"author":{"id":"3561508330885091","authorId":"3561508330885091","name":"杰力安心睡大觉","avatar":"https://static.tigerbbs.com/479664bdd5087d57cfa715e187b1cc6d","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3561508330885091","authorIdStr":"3561508330885091"},"themes":[],"htmlText":"One of the great analysis I ever read","listText":"One of the great analysis I ever read","text":"One of the great analysis I ever read","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9082564553","repostId":"2229181512","repostType":2,"repost":{"id":"2229181512","pubTimestamp":1650561300,"share":"https://ttm.financial/m/news/2229181512?lang=&edition=fundamental","pubTime":"2022-04-22 01:15","market":"us","language":"en","title":"Amazon And Microsoft: The Better Buy Might Surprise You","url":"https://stock-news.laohu8.com/highlight/detail?id=2229181512","media":"seekingalpha","summary":"Viktor_Gladkov/iStock via Getty Images The surge in interest rates this year, triggered by the highe","content":"<html><body><p><figure><picture> <img height=\"1025px\" src=\"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1277377483/image_1277377483.jpg?io=getty-c-w750\" srcset=\"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1277377483/image_1277377483.jpg?io=getty-c-w1536 1536w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1277377483/image_1277377483.jpg?io=getty-c-w1280 1280w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1277377483/image_1277377483.jpg?io=getty-c-w1080 1080w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1277377483/image_1277377483.jpg?io=getty-c-w750 750w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1277377483/image_1277377483.jpg?io=getty-c-w640 640w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1277377483/image_1277377483.jpg?io=getty-c-w480 480w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1277377483/image_1277377483.jpg?io=getty-c-w320 320w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1277377483/image_1277377483.jpg?io=getty-c-w240 240w\" width=\"1536px\"/> </picture><figcaption> <p>Viktor_Gladkov/iStock via Getty Images</p></figcaption></figure></p> <p>The surge in interest rates this year, triggered by the highest inflation and most hawkish Fed in 40 years, has been a wonder to behold.</p> <p><figure><span><img height=\"511\" hspace=\"6\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/20/47572571-16504744835510375.jpg\" vspace=\"6\" width=\"640\"/></span><figcaption><p><span>Daily Shot </span></p></figcaption></figure></p> <p>And not surprisingly, the speed and severity of this<span> move in rates has caused a sharp selloff in many of today's most popular growth stocks.</span></p> <p><figure><span><img height=\"474\" hspace=\"6\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/20/47572571-16504745515956116.jpg\" vspace=\"6\" width=\"640\"/></span><figcaption><p><span>Daily Shot </span></p></figcaption></figure></p> <p>In fact, the median Nasdaq stock, which includes 3,700 companies, is down almost 40% off its high.</p> <p><figure><span><img hspace=\"6\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/20/47572571-16504746874020505.png\" vspace=\"6\"/></span><figcaption><p><span>Ycharts</span></p></figcaption></figure></p> <p>Today, Amazon (<span>NASDAQ:AMZN</span>), Microsoft (<span>NASDAQ:MSFT</span>) and the Nasdaq (QQQ) are all down about 15% off recent highs.</p> <p>These three all represent great ways to own the highest quality tech names, and compound your wealth over time.</p> <h4>Historical Rolling Returns Since 1999</h4> <p><figure><span><img hspace=\"6\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/20/47572571-16504748749473925.png\" vspace=\"6\"/></span><figcaption><p><span>(Source: Portfolio Visualizer Premium)</span></p></figcaption></figure></p> <p>But while such impressive historical returns are nice, you can't buy past returns.</p> <p>So let me compare and contrast Amazon and Microsoft, two of the world's premier tech giants, to show you</p> <ul> <li>why nearly every investor should own these legendary growth blue-chips</li> <li>which is the highest quality company</li> <li>which is the better and safer buy for your hard-earned money today</li> </ul> <h2>Quality And Safety: Winner Microsoft (But Not By Much)</h2> <p>There are many ways to define and measure quality. So how do I do it?</p> <p>The Dividend King's overall quality scores are based on a 248-point model that includes:</p> <ul> <li><p>dividend safety</p></li> <li><p>balance sheet strength</p></li> <li><p>credit ratings</p></li> <li><p>credit default swap medium-term bankruptcy risk data</p></li> <li><p>short and long-term bankruptcy risk</p></li> <li><p>accounting and corporate fraud risk</p></li> <li><p>profitability and business model</p></li> <li><p>growth consensus estimates</p></li> <li><p>management growth guidance</p></li> <li><p>historical earnings growth rates</p></li> <li><p>historical cash flow growth rates</p></li> <li><p>historical dividend growth rates</p></li> <li><p>historical sales growth rates</p></li> <li><p>cost of capital</p></li> <li><p>GF Scores</p></li> <li><p>long-term risk-management scores from MSCI, Morningstar, FactSet, S&amp;P, Reuters'/Refinitiv, and Just Capital</p></li> <li><p>management quality</p></li> <li><p>dividend friendly corporate culture/income dependability</p></li> <li><p>long-term total returns (a Ben Graham sign of quality)</p></li> <li><p>analyst consensus long-term return potential</p></li> </ul> <p>In fact, it includes over 1,000 fundamental metrics including the 12 rating agencies we use to assess fundamental risk.</p> <ul> <li>credit and risk management ratings make up 41% of the DK safety and quality model</li> <li>dividend/balance sheet/risk ratings make up 82% of the DK safety and quality model</li> </ul> <p>How do we know that our safety and quality model works well?</p> <p>During the two worst recessions in 75 years, our safety model 87% of blue-chip dividend cuts, the ultimate baptism by fire for any dividend safety model.</p> <p>And then there's the confirmation that our quality ratings are accurate.</p> <h4>DK Zen Phoenix: Superior Fundamentals Lead To Superior Long-Term Results</h4> <span><table> <colgroup> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Metric</strong></td> <td><strong>US Stocks</strong></td> <td><strong>191 Real Money DK Phoenix Recs</strong></td> </tr> <tr> <td>Great Recession Dividend Growth</td> <td>-25%</td> <td>0%</td> </tr> <tr> <td>Pandemic Dividend Growth</td> <td>-1%</td> <td>6%</td> </tr> <tr> <td>Positive Total Returns Over The Last 10 Years</td> <td>42%</td> <td>99.5% (Greatest Investors In History 60% to 80% Over Time)</td> </tr> <tr> <td>Lost Money/Went Bankrupt Over The Last 10 Years</td> <td>47%</td> <td>0.5%</td> </tr> <tr> <td>Outperformed Market Over The Last Decade (290%)</td> <td>36%</td> <td>46%</td> </tr> <tr> <td>Bankruptcies Over The Last 10 Years</td> <td>11%</td> <td>0%</td> </tr> <tr> <td>Permanent 70+% Catastrophic Decline Since 1980</td> <td>44%</td> <td>0.5%</td> </tr> <tr> <td>100+% Total Return Over The Past 10 Years</td> <td>NA</td> <td>87%</td> </tr> <tr> <td>200+% Total Return Over The Past 10 Years</td> <td>NA</td> <td>66%</td> </tr> <tr> <td>300+% Total Return Over The Past 10 Years</td> <td>NA</td> <td>44%</td> </tr> <tr> <td>400+% Total Return Over The Past 10 Years</td> <td>NA</td> <td>35%</td> </tr> <tr> <td>500+% Total Return Over The Past 10 Years</td> <td>NA</td> <td>27%</td> </tr> <tr> <td>600+% Total Return Over The Past 10 Years</td> <td>NA</td> <td>23%</td> </tr> <tr> <td>700+% Total Return Over The Past 10 Years</td> <td>NA</td> <td>20%</td> </tr> <tr> <td>800+% Total Return Over The Past 10 Years</td> <td>NA</td> <td>18%</td> </tr> <tr> <td>900+% Total Return Over The Past 10 Years</td> <td>NA</td> <td>18%</td> </tr> <tr> <td>1000+% Total Return Over The Past 10 Years</td> <td>NA</td> <td>16%</td> </tr> <tr> <td>Sources: Morningstar, JPMorgan, Seeking Alpha</td> <td> </td> <td> </td> </tr> </table></span> <p>Basically, historical market data confirms that the DK safety and quality model is comprehensive and accurate.</p> <p>This is why I and my family entrust almost 100% of my life savings to this model and the DK Phoenix blue-chip strategy.</p> <p>How do Microsoft and Amazon score on our safety and quality model?</p> <p><strong>Microsoft Dividend Safety</strong></p> <span><table> <colgroup> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Rating</strong></td> <td><strong>Dividend Kings Safety Score (161 Point Safety Model)</strong></td> <td><strong>Approximate Dividend Cut Risk (Average Recession)</strong></td> <td><p><strong>Approximate Dividend Cut Risk In Pandemic Level Recession</strong></p></td> </tr> <tr> <td>1 - unsafe</td> <td>0% to 20%</td> <td>over 4%</td> <td>16+%</td> </tr> <tr> <td>2- below average</td> <td>21% to 40%</td> <td>over 2%</td> <td>8% to 16%</td> </tr> <tr> <td>3 - average</td> <td>41% to 60%</td> <td>2%</td> <td>4% to 8%</td> </tr> <tr> <td>4 - safe</td> <td>61% to 80%</td> <td>1%</td> <td>2% to 4%</td> </tr> <tr> <td>5- very safe</td> <td>81% to 100%</td> <td>0.5%</td> <td>1% to 2%</td> </tr> <tr> <td><strong>MSFT</strong></td> <td><strong>100%</strong></td> <td><strong>0.50%</strong></td> <td><strong>1.0%</strong></td> </tr> <tr> <td>Risk Rating</td> <td>Low-Risk (92nd industry percentile consensus)</td> <td>AAA stable credit rating 0.07% 30-year bankruptcy risk</td> <td>20% OR LESS Max Risk Cap Recommendation</td> </tr> </table></span> <p><strong>Long-Term Dependability</strong></p> <span><table> <colgroup> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Company</strong></td> <td><strong>DK Long-Term Dependability Score</strong></td> <td><strong>Interpretation</strong></td> <td><strong>Points</strong></td> </tr> <tr> <td>Non-Dependable Companies</td> <td>21% or below</td> <td>Poor Dependability</td> <td>1</td> </tr> <tr> <td>Low Dependability Companies</td> <td>22% to 60%</td> <td>Below-Average Dependability</td> <td>2</td> </tr> <tr> <td>S&amp;P 500/Industry Average</td> <td>61% (58% to 70% range)</td> <td>Average Dependability</td> <td>3</td> </tr> <tr> <td>Above-Average</td> <td>71% to 80%</td> <td>Very Dependable</td> <td>4</td> </tr> <tr> <td>Very Good</td> <td>81% or higher</td> <td>Exceptional Dependability</td> <td>5</td> </tr> <tr> <td><strong>MSFT</strong></td> <td><strong>99%</strong></td> <td><strong>Exceptional Dependability</strong></td> <td><strong>5</strong></td> </tr> </table></span> <p><strong>Overall Quality</strong></p> <span><table> <colgroup> <col/> <col/> <col/> </colgroup> <tr> <td><strong>MSFT</strong></td> <td><strong>Final Score</strong></td> <td><strong>Rating</strong></td> </tr> <tr> <td>Safety</td> <td>100%</td> <td>5/5 very safe</td> </tr> <tr> <td>Business Model</td> <td>100%</td> <td>3/3 wide moat</td> </tr> <tr> <td>Dependability</td> <td>99%</td> <td>5/5 exceptional</td> </tr> <tr> <td><strong>Total</strong></td> <td><strong>99%</strong></td> <td><strong>13/13 Ultra SWAN</strong></td> </tr> <tr> <td>Risk Rating</td> <td>3/3 Low Risk</td> <td> </td> </tr> <tr> <td>20% OR LESS Max Risk Cap Rec</td> <td><p>5% Margin of Safety For A Potentially Good Buy</p></td> </tr> </table></span> <p>Microsoft is as close to a perfect growth blue-chips as exists on Wall Street.</p> <p>And so is Amazon.</p> <p><strong>AMZN Balance Sheet Safety</strong></p> <span><table> <colgroup> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Rating</strong></td> <td><strong>Dividend Kings Safety Score (161 Point Safety Model)</strong></td> <td><strong>Approximate Dividend Cut Risk (Average Recession)</strong></td> <td><p><strong>Approximate Dividend Cut Risk In Pandemic Level Recession</strong></p></td> </tr> <tr> <td>1 - unsafe</td> <td>0% to 20%</td> <td>over 4%</td> <td>16+%</td> </tr> <tr> <td>2- below average</td> <td>21% to 40%</td> <td>over 2%</td> <td>8% to 16%</td> </tr> <tr> <td>3 - average</td> <td>41% to 60%</td> <td>2%</td> <td>4% to 8%</td> </tr> <tr> <td>4 - safe</td> <td>61% to 80%</td> <td>1%</td> <td>2% to 4%</td> </tr> <tr> <td>5- very safe</td> <td>81% to 100%</td> <td>0.5%</td> <td>1% to 2%</td> </tr> <tr> <td><strong>AMZN</strong></td> <td><strong>100%</strong></td> <td><strong>NA</strong></td> <td><strong>NA</strong></td> </tr> <tr> <td>Risk Rating</td> <td>Medium-Risk (53rd industry percentile risk-management consensus)</td> <td>AA Stable outlook credit rating 0.51% 30-year bankruptcy risk</td> <td>20% OR LESS Max Risk Cap Recommendation</td> </tr> </table></span> <p><strong>Long-Term Dependability</strong></p> <span><table> <colgroup> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Company</strong></td> <td><strong>DK Long-Term Dependability Score</strong></td> <td><strong>Interpretation</strong></td> <td><strong>Points</strong></td> </tr> <tr> <td>Non-Dependable Companies</td> <td>21% or below</td> <td>Poor Dependability</td> <td>1</td> </tr> <tr> <td>Low Dependability Companies</td> <td>22% to 60%</td> <td>Below-Average Dependability</td> <td>2</td> </tr> <tr> <td>S&amp;P 500/Industry Average</td> <td>61% (61% to 70% range)</td> <td>Average Dependability</td> <td>3</td> </tr> <tr> <td>Above-Average</td> <td>71% to 80%</td> <td>Very Dependable</td> <td>4</td> </tr> <tr> <td>Very Good</td> <td>81% or higher</td> <td>Exceptional Dependability</td> <td>5</td> </tr> <tr> <td><strong>AMZN</strong></td> <td><strong>84%</strong></td> <td><strong>Exceptional Dependability</strong></td> <td><strong>5</strong></td> </tr> </table></span> <p><strong>Overall Quality</strong></p> <span><table> <colgroup> <col/> <col/> <col/> </colgroup> <tr> <td><strong>AMZN</strong></td> <td><strong>Final Score</strong></td> <td><strong>Rating</strong></td> </tr> <tr> <td>Safety</td> <td>100%</td> <td>5/5 Very Safe</td> </tr> <tr> <td>Business Model</td> <td>90%</td> <td>3/3 Wide Moat - Stable</td> </tr> <tr> <td>Dependability</td> <td>84%</td> <td>5/5 Exceptional</td> </tr> <tr> <td><strong>Total</strong></td> <td><strong>93%</strong></td> <td><strong>13/13 Ultra SWAN</strong></td> </tr> <tr> <td>Risk Rating</td> <td><p>2/3 medium Risk</p></td> <td> </td> </tr> <tr> <td>20% OR LESS Max Risk Cap Rec - speculative</td> <td><p>5% Margin of Safety For A Potentially Good Buy</p></td> </tr> </table></span> <p>However, in this head-to-head comparison, Microsoft edges out Amazon slightly.</p> <p><em>MSFT: 3rd Highest Quality Master List Company (Out of 506) = 99th Percentile</em></p> <p><em>AMZN: 31st Highest Quality Master List Company (Out of 506) = 94th Percentile</em></p> <p>Why is Microsoft a higher quality company than Amazon?</p> <p>Let's start with the balance sheet.</p> <h4>AMZN Credit Ratings</h4> <span><table> <colgroup> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Rating Agency</strong></td> <td><strong>Credit Rating</strong></td> <td><strong>30-Year Default/Bankruptcy Risk</strong></td> <td><strong>Chance of Losing 100% Of Your Investment 1 In</strong></td> </tr> <tr> <td>S&amp;P</td> <td>AA Stable</td> <td>0.51%</td> <td>196.1</td> </tr> <tr> <td>Fitch</td> <td>AA- Stable</td> <td>0.55%</td> <td>181.8</td> </tr> <tr> <td>Moody's</td> <td>A1 (A+ equivalent) Stable</td> <td>0.60%</td> <td>166.7</td> </tr> <tr> <td><strong>Consensus</strong></td> <td><strong>AA- Stable</strong></td> <td><strong>0.55%</strong></td> <td><strong>180.7</strong></td> </tr> </table></span> <p><em>(Source: S&amp;P, Moody's, Fitch)</em></p> <p>Rating agencies estimate a 0.55% fundamental risk in buying Amazon today.</p> <ul><li>1 in 181 chance of losing all your money over the next 30 years</li></ul> <p>Amazon's balance sheet is a fortress.</p> <h4>AMZN Leverage Consensus Forecast</h4> <span><table> <colgroup> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Year</strong></td> <td><strong>Debt/EBITDA</strong></td> <td><strong>Net Debt/EBITDA (3.0 Or Less Safe According To Credit Rating Agencies)</strong></td> <td><p><strong>Interest Coverage (8+ Safe)</strong></p></td> </tr> <tr> <td>2020</td> <td>0.56</td> <td>-0.09</td> <td>13.90</td> </tr> <tr> <td>2021</td> <td>0.68</td> <td>-0.28</td> <td>13.75</td> </tr> <tr> <td>2022</td> <td>0.60</td> <td>-0.28</td> <td>14.96</td> </tr> <tr> <td>2023</td> <td>0.45</td> <td>-0.47</td> <td>21.44</td> </tr> <tr> <td>2024</td> <td>0.32</td> <td>-0.64</td> <td>34.48</td> </tr> <tr> <td>2025</td> <td>0.29</td> <td>-0.99</td> <td>48.37</td> </tr> <tr> <td>2026</td> <td>0.24</td> <td>-1.66</td> <td>61.11</td> </tr> <tr> <td>2027</td> <td>0.20</td> <td>-1.83</td> <td>74.33</td> </tr> <tr> <td><strong>Annualized Change</strong></td> <td><strong>-13.62%</strong></td> <td><strong>54.14%</strong></td> <td><strong>27.06%</strong></td> </tr> </table></span> <p><em>(Source: FactSet Research Terminal)</em></p> <p>Amazon has more cash than debt already and its balance sheet is expected to get rapidly stronger over time.</p> <h4>AMZN Balance Sheet Consensus Forecast</h4> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Year</strong></td> <td><strong>Total Debt (Millions)</strong></td> <td><strong>Cash</strong></td> <td><strong>Net Debt (Millions)</strong></td> <td><strong>Interest Cost (Millions)</strong></td> <td><strong>EBITDA (Millions)</strong></td> <td><strong>Operating Income (Millions)</strong></td> </tr> <tr> <td>2020</td> <td>$31,816</td> <td>$42,122</td> <td>-$5,079</td> <td>$1,647</td> <td>$57,284</td> <td>$22,899</td> </tr> <tr> <td>2021</td> <td>$48,744</td> <td>$36,220</td> <td>-$20,346</td> <td>$1,809</td> <td>$71,994</td> <td>$24,879</td> </tr> <tr> <td>2022</td> <td>$48,663</td> <td>$74,694</td> <td>-$22,258</td> <td>$2,063</td> <td>$80,760</td> <td>$30,865</td> </tr> <tr> <td>2023</td> <td>$47,163</td> <td>$113,701</td> <td>-$49,136</td> <td>$2,188</td> <td>$104,819</td> <td>$46,921</td> </tr> <tr> <td>2024</td> <td>$42,366</td> <td>$167,534</td> <td>-$85,508</td> <td>$2,041</td> <td>$133,792</td> <td>$70,372</td> </tr> <tr> <td>2025</td> <td>$47,900</td> <td>$321,148</td> <td>-$164,569</td> <td>$1,936</td> <td>$165,979</td> <td>$93,647</td> </tr> <tr> <td>2026</td> <td>$47,900</td> <td>$465,285</td> <td>-$335,981</td> <td>$1,982</td> <td>$202,841</td> <td>$121,127</td> </tr> <tr> <td>2027</td> <td>$47,483</td> <td>$566,899</td> <td>-$436,861</td> <td>$2,032</td> <td>$238,295</td> <td>$151,031</td> </tr> <tr> <td><strong>Annualized Growth</strong></td> <td><strong>5.89%</strong></td> <td><strong>44.97%</strong></td> <td><strong>88.96%</strong></td> <td><strong>3.05%</strong></td> <td><strong>22.59%</strong></td> <td><strong>30.93%</strong></td> </tr> </table></span> <p><em>(Source: FactSet Research Terminal)</em></p> <ul> <li>cash position growing at 45% CAGR</li> <li>net cash growing at 89% CAGR</li> <li>cash flows growing at 23% to 31% CAGR</li> <li>by 2027 an estimated $436 billion in net cash</li> <li>$567 billion in total cash</li> <li>Apple began the largest capital return in history at $250 billion in cash</li> </ul> <p>But Microsoft's balance sheet is even more impressive.</p> <h2>Microsoft: Possibly The Safest Company In America</h2> <span><table> <colgroup> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Rating Agency</strong></td> <td><strong>Credit Rating</strong></td> <td><strong>30-Year Default/Bankruptcy Risk</strong></td> <td><strong>Chance of Losing 100% Of Your Investment 1 In</strong></td> </tr> <tr> <td>S&amp;P</td> <td>AAA Stable</td> <td>0.07%</td> <td>1428.6</td> </tr> <tr> <td>Fitch</td> <td>AAA Stable</td> <td>0.07%</td> <td>1428.6</td> </tr> <tr> <td>Moody's</td> <td>Aaa (AAA equivalent) Stable</td> <td>0.07%</td> <td>1428.6</td> </tr> <tr> <td><strong>Consensus</strong></td> <td><strong>AAA Stable</strong></td> <td><strong>0.07%</strong></td> <td><strong>1428.6</strong></td> </tr> </table></span> <p><em>(Source: S&amp;P, Moody's, Fitch)</em></p> <p>MSFT is the only company in America with AAA credit ratings from all three rating agencies (JNJ has AAA ratings from two).</p> <p>This means that S&amp;P and Fitch consider MSFT at lower risk of defaulting on its debt than the US Treasury.</p> <ul> <li>S&amp;P rates the US AA+ stable</li> <li>Fitch rates the US AAA with a negative outlook (33% chance of a downgrade)</li> </ul> <p>Why do the rating agencies consider MSFT to be essentially \"risk-free\"?</p> <h4>MSFT Leverage Consensus Forecast</h4> <span><table> <colgroup> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Year</strong></td> <td><strong>Debt/EBITDA</strong></td> <td><strong>Net Debt/EBITDA (3.0 Or Less Safe According To Credit Rating Agencies)</strong></td> <td><p><strong>Interest Coverage (8+ Safe)</strong></p></td> </tr> <tr> <td>2020</td> <td>0.96</td> <td>-1.11</td> <td>25.28</td> </tr> <tr> <td>2021</td> <td>0.71</td> <td>-0.88</td> <td>NA</td> </tr> <tr> <td>2022</td> <td>0.53</td> <td>-0.70</td> <td>79.74</td> </tr> <tr> <td>2023</td> <td>0.45</td> <td>-0.69</td> <td>90.96</td> </tr> <tr> <td>2024</td> <td>0.37</td> <td>-1.23</td> <td>108.96</td> </tr> <tr> <td><strong>Annualized Change</strong></td> <td><strong>-21.20%</strong></td> <td><strong>2.45%</strong></td> <td><strong>44.09%</strong></td> </tr> </table></span> <p><em>(Source: FactSet Research Terminal)</em></p> <p>Microsoft has had more cash than debt for well over a decade, and its financial strength is expected to keep improving steadily.</p> <h4>MSFT Balance Sheet Consensus Forecast</h4> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Year</strong></td> <td><strong>Total Debt (Millions)</strong></td> <td><strong>Cash</strong></td> <td><strong>Net Debt (Millions)</strong></td> <td><strong>Interest Cost (Millions)</strong></td> <td><strong>EBITDA (Millions)</strong></td> <td><strong>Operating Income (Millions)</strong></td> </tr> <tr> <td>2020</td> <td>$63,327</td> <td>$13,576</td> <td>-$73,200</td> <td>$2,095</td> <td>$65,755</td> <td>$52,959</td> </tr> <tr> <td>2021</td> <td>$58,146</td> <td>$14,224</td> <td>-$72,188</td> <td>NA</td> <td>$81,602</td> <td>$69,916</td> </tr> <tr> <td>2022</td> <td>$52,522</td> <td>$40,008</td> <td>-$69,237</td> <td>$1,053</td> <td>$99,454</td> <td>$83,961</td> </tr> <tr> <td>2023</td> <td>$51,431</td> <td>$88,238</td> <td>-$78,980</td> <td>$1,055</td> <td>$114,791</td> <td>$95,965</td> </tr> <tr> <td>2024</td> <td>$48,838</td> <td>$124,229</td> <td>-$161,300</td> <td>$1,027</td> <td>$131,511</td> <td>$111,903</td> </tr> <tr> <td><strong>Annualized Growth</strong></td> <td><strong>-6.29%</strong></td> <td><strong>73.93%</strong></td> <td><strong>21.84%</strong></td> <td><strong>-16.32%</strong></td> <td><strong>18.92%</strong></td> <td><strong>20.57%</strong></td> </tr> </table></span> <p><em>(Source: FactSet Research Terminal)</em></p> <p>MSFT is expected to have $124 billion in cash by 2024, and including its receivables (it's a recurring monthly revenue business) a net cash position of $161 billion.</p> <p>Impressively, its cash flows are expected to be growing at close to 20%, despite its massive size.</p> <ul> <li>2024 EBITDA of $132 billion would be the 58th largest country on earth if it were its own economy</li> <li>larger than Kuwait's GDP</li> </ul> <p>What about other measures of quality?</p> <p>Ben Graham considered a 20+ year dividend growth streak to be a sign of excellent quality.</p> <p><figure><span><img hspace=\"6\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/3/28/47572571-16484819415825503.jpg\" vspace=\"6\"/></span><figcaption><p><span>Justin Law </span></p></figcaption></figure><figure><figcaption><p>If a company has grown its dividends for 20+ years, there is very little risk that it will cut its dividend or even fail to keep raising it in all economic and industry conditions.</p></figcaption></figure></p> <p>Microsoft began paying a quarterly dividend in 2003 and has been raising it without fail ever since.</p> <ul><li>18-year dividend growth streak (excluding special dividends)</li></ul> <p>That means MSFT will achieve the Graham standard of excellence in 2024 and become a dividend aristocrat in 2029.</p> <p>Amazon doesn't pay a dividend...yet, but is likely to in the future.</p> <ul> <li>$567 billion in cash by 2027</li> <li>after investing $700 billion in growth over the next five years and</li> <li>$180 billion in annual cash flow adding to the cash pile growing at 20% in 2027 according to analysts</li> </ul> <p>If Amazon grows as analysts expect, a dividend is a mathematical certainty at some point.</p> <ul><li>no dividend is expected until 2028 at the earliest</li></ul> <p>And what about Wall Street's favorite quality metric, profitability?</p> <h2> </h2> <h2>Profitability: Wall Street's Favorite Quality Proxy</h2> <p><strong>Amazon's Profitability Is Sensational</strong></p> <p>AMZN's profitability is historically within the top 10% of peers.</p> <h4>AMZN Trailing 12-Month Profitability Vs. Peers</h4> <span><table> <colgroup> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Metric</strong></td> <td><strong>Industry Percentile</strong></td> <td><strong>Major Cyclical Retailers More Profitable Than AMZN (Out Of 1,099)</strong></td> </tr> <tr> <td>Operating Margin</td> <td>57.30</td> <td>469</td> </tr> <tr> <td>Net Margin</td> <td>74.77</td> <td>277</td> </tr> <tr> <td>Return On Equity</td> <td>87.52</td> <td>137</td> </tr> <tr> <td>Return On Assets</td> <td>81.98</td> <td>198</td> </tr> <tr> <td>Return On Capital</td> <td>65.17</td> <td>NA</td> </tr> <tr> <td><strong>Average</strong></td> <td><strong>73.35</strong></td> <td><strong>293</strong></td> </tr> </table></span> <p><em>(Source: Gurufocus Premium)</em></p> <p>AMZN's operating margins have taken a hit as it ramps up its growth spending, plus faces rising input costs on things like shipping.</p> <ul><li>thus the 5% fuel and delivery surcharge it's applying to 3rd party sellers</li></ul> <p>Over the last 20 years, AMZN's industry-leading profitability has been stable or improving, confirming a wide and stable moat.</p> <h4>AMZN Margin Consensus Forecast</h4> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Year</strong></td> <td><strong>FCF Margin</strong></td> <td><strong>EBITDA Margin</strong></td> <td><strong>EBIT (Operating) Margin</strong></td> <td><strong>Net Margin</strong></td> <td><strong>Return On Capital Expansion</strong></td> <td><p><strong>Return On Capital Forecast</strong></p></td> </tr> <tr> <td>2020</td> <td>8.0%</td> <td>14.8%</td> <td>5.9%</td> <td>5.5%</td> <td>2.80</td> <td> </td> </tr> <tr> <td>2021</td> <td>-1.9%</td> <td>15.3%</td> <td>5.3%</td> <td>7.1%</td> <td>TTM ROC</td> <td>22.10%</td> </tr> <tr> <td>2022</td> <td>5.6%</td> <td>14.9%</td> <td>5.7%</td> <td>4.7%</td> <td>Latest ROC</td> <td>29.67%</td> </tr> <tr> <td>2023</td> <td>7.8%</td> <td>16.5%</td> <td>7.4%</td> <td>6.2%</td> <td>2027 ROC</td> <td>61.91%</td> </tr> <tr> <td>2024</td> <td>9.5%</td> <td>18.3%</td> <td>9.6%</td> <td>8.0%</td> <td>2027 ROC</td> <td>83.12%</td> </tr> <tr> <td>2025</td> <td>10.3%</td> <td>20.2%</td> <td>11.4%</td> <td>9.3%</td> <td><strong>Average</strong></td> <td><strong>72.52%</strong></td> </tr> <tr> <td>2026</td> <td>16.6%</td> <td>22.2%</td> <td>13.3%</td> <td>11.2%</td> <td>Industry Median</td> <td>12.00%</td> </tr> <tr> <td>2027</td> <td>18.1%</td> <td>23.4%</td> <td>14.8%</td> <td>12.5%</td> <td><strong>AMZN/Industry Median</strong></td> <td><strong>6.04</strong></td> </tr> <tr> <td><strong>Annualized Growth</strong></td> <td><strong>12.31%</strong></td> <td><strong>6.73%</strong></td> <td><strong>13.99%</strong></td> <td><strong>12.39%</strong></td> <td><strong>Vs S&amp;P</strong></td> <td><strong>4.97</strong></td> </tr> <tr> <td>Annualized Growth (Ignoring Pandemic)</td> <td>NA</td> <td>7.32%</td> <td>18.73%</td> <td>9.90%</td> <td> </td> <td> </td> </tr> </table></span> <p><em>(Source: FactSet Research Terminal)</em></p> <p>AMZN's free cash flow margins are expected to triple over the next four years, to 18%. All of its margins are expected to grow at rates that many growth stocks would love to grow their sales at.</p> <p>Return on capital is pre-tax profit/operating capital (the money it takes to run the business).</p> <ul> <li>Joel Greenblatt's gold standard proxy for quality and moatiness</li> <li>Analysts are expecting a 73% ROC in 2027.</li> <li>the average investment pays for itself in 17 months vs 7 years for the S&amp;P 500</li> <li>6X the industry's ROC</li> <li>5X the S&amp;P 500's ROC</li> </ul> <p><strong>AMZN's ROC Has Been Stable For A Decade</strong></p> <p>AMZN's ability to sustain industry-leading profitability over the decades despite all its challenges and risks confirms a wide and stable moat.</p> <h2> </h2> <p>But as amazing as AMZN's profitability is, it pales in comparison to Microsoft's.</p> <h2><strong>Microsoft's Profitability Is Even Better </strong></h2> <p>Microsoft's profitability is historically in the top 4% of its peers, earning it a 10/10 on Gurufocus's profitability model.</p> <h4>MSFT Trailing 12-Month Profitability Vs. Peers</h4> <span><table> <colgroup> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Metric</strong></td> <td><strong>Industry Percentile</strong></td> <td><strong>Major Software Companies More Profitable Than MSFT (Out Of 2,615)</strong></td> </tr> <tr> <td>Operating Margin</td> <td>97.87</td> <td>56</td> </tr> <tr> <td>Net Margin</td> <td>96.80</td> <td>84</td> </tr> <tr> <td>Return On Equity</td> <td>97.09</td> <td>76</td> </tr> <tr> <td>Return On Assets</td> <td>96.21</td> <td>99</td> </tr> <tr> <td>Return On Capital</td> <td>79.89</td> <td>100</td> </tr> <tr> <td><strong>Average</strong></td> <td><strong>93.57</strong></td> <td><strong>168</strong></td> </tr> </table></span> <p><em>(Source: Gurufocus Premium)</em></p> <p>MSFT's profitability is so immense that it's the 169th most profitable large software company in the world, out of 2,615.</p> <p>MSFT's profitability is the stuff of legend, remaining relatively stable over 20 years.</p> <ul><li>A free cash flow margin of 33% is in the top 10% of all companies on earth.</li></ul> <h4>MSFT Margin Consensus Forecast</h4> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td>Year</td> <td>FCF Margin</td> <td>EBITDA Margin</td> <td>EBIT (Operating) Margin</td> <td>Net Margin</td> <td>Return On Capital Expansion</td> <td><p>Return On Capital Forecast</p></td> </tr> <tr> <td>2020</td> <td>31.6%</td> <td>46.0%</td> <td>37.0%</td> <td>31.0%</td> <td>1.05</td> <td> </td> </tr> <tr> <td>2021</td> <td>33.4%</td> <td>48.5%</td> <td>41.6%</td> <td>36.1%</td> <td>TTM ROC</td> <td>115.93%</td> </tr> <tr> <td>2022</td> <td>32.6%</td> <td>50.1%</td> <td>42.3%</td> <td>35.7%</td> <td>Latest ROC</td> <td>118.98%</td> </tr> <tr> <td>2023</td> <td>33.4%</td> <td>50.7%</td> <td>42.4%</td> <td>35.3%</td> <td>2024 ROC</td> <td>121.26%</td> </tr> <tr> <td>2024</td> <td>34.2%</td> <td>51.1%</td> <td>43.5%</td> <td>36.0%</td> <td>2024 ROC</td> <td>124.45%</td> </tr> <tr> <td>2025</td> <td>NA</td> <td>NA</td> <td>NA</td> <td>NA</td> <td>Average</td> <td>122.86%</td> </tr> <tr> <td>2026</td> <td>NA</td> <td>NA</td> <td>NA</td> <td>NA</td> <td>Industry Median</td> <td>14.50%</td> </tr> <tr> <td>2027</td> <td>NA</td> <td>NA</td> <td>NA</td> <td>NA</td> <td><strong>MSFT/Industry Median</strong></td> <td><strong>8.47</strong></td> </tr> <tr> <td><strong>Annualized Growth</strong></td> <td><strong>1.95%</strong></td> <td><strong> 2.69% </strong></td> <td><strong> 4.11% </strong></td> <td><strong>3.85%</strong></td> <td><em><strong>Vs S&amp;P</strong></em></td> <td><em><strong>8.41</strong></em></td> </tr> <tr> <td>Annualized Growth (Ignoring Pandemic)</td> <td>0.77%</td> <td>1.74%</td> <td>1.51%</td> <td>-0.06%</td> <td> </td> <td> </td> </tr> </table></span> <p><em>(Source: FactSet Research Terminal)</em></p> <p>MSFT's incredible margins are expected to remain stable or improve slightly in the next few years.</p> <p>Analysts are expecting a 123% ROC in 2027.</p> <ul> <li>the average investment pays for itself in 10 months vs. 7 years for the S&amp;P 500</li> <li>8.5X the industry's ROC</li> <li>8X the S&amp;P 500's ROC</li> </ul> <p><strong>MSFT ROC Has Been Stable For Three Decades </strong></p> <p>MSFT's ability to sustain industry-leading profitability over three decades despite all its challenges and risks confirms a wide and stable moat.</p> <h2> </h2> <p>But of course, quality alone isn't enough to generate great returns.</p> <ul> <li>growth without quality and safety leads to eventual catastrophic losses</li> <li>safety and quality without growth leads to bond like returns</li> </ul> <h2>Growth Prospects: Winner Amazon</h2> <p>Cloud computing is <a href=\"https://laohu8.com/S/AONE.U\">one</a> of the largest secular mega-trends in the world.</p> <p><figure><span> <picture> </picture></span><span><img hspace=\"6\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/19/47572571-16503645186279058.png\" vspace=\"6\"/></span><figcaption><p><span>Statista</span></p></figcaption></figure></p> <p>In 2021, cloud computing grew at 37% while AWS grew at 37%.</p> <ul><li>Amazon is maintaining market share in cloud computing, despite the competition from MSFT, GOOG, CRM, <a href=\"https://laohu8.com/S/IBM\">IBM</a>, and ORCL.</li></ul> <p>Cloud Computing Market Size Worth $1,554.94 Billion by 2030: Grand View Research, Inc.</p> <p>Grandview Research expects the global cloud market to grow about 16% annually through 2030, meaning that AMZN is expected to maintain or even increase its market share.</p> <p>IOT analytics thinks cloud computing will be worth $2 trillion per year within 10 to 20 years, and potentially as much as $10 trillion.</p> <ul> <li>IOT estimates that conservatively cloud computing will grow at least 4X in the next 10 to 20 years</li> <li>likely 13X growth</li> <li>potentially 64X growth</li> <li>cloud computing alone is a secular megatrend that Amazon could surf for decades to come</li> </ul> <p>MSFT's cloud computing business grew 50% in 2021, gaining market share. Not from Amazon but from struggling rivals like IBM (IBM).</p> <p>And for the next few years, analysts expect that MSFT will keep gaining market share in the cloud.</p> <ul> <li>44% growth in 2022</li> <li>36% growth in 2023</li> <li>34% growth in 2024</li> </ul> <p>Is it any wonder that MSFT is expected to invest massively into growth?</p> <p><strong>MSFT Growth Spending Consensus Forecast</strong></p> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td>Year</td> <td>SG&amp;A (Selling, General, Administrative)</td> <td>R&amp;D</td> <td>Capex</td> <td>Total Growth Spending</td> <td>Sales</td> <td>Growth Spending/Sales</td> </tr> <tr> <td>2020</td> <td>$24,709</td> <td>$19,269</td> <td>$45,234</td> <td>$89,212</td> <td>$143,015</td> <td>62.38%</td> </tr> <tr> <td>2021</td> <td>$25,224</td> <td>$20,716</td> <td>$56,118</td> <td>$102,058</td> <td>$168,088</td> <td>60.72%</td> </tr> <tr> <td>2022</td> <td>$28,218</td> <td>$23,755</td> <td>$64,738</td> <td>$116,711</td> <td>$198,655</td> <td>58.75%</td> </tr> <tr> <td>2023</td> <td>$31,017</td> <td>$26,587</td> <td>$75,731</td> <td>$133,335</td> <td>$226,582</td> <td>58.85%</td> </tr> <tr> <td>2024</td> <td>$32,224</td> <td>$29,592</td> <td>$87,878</td> <td>$149,694</td> <td>$257,200</td> <td>58.20%</td> </tr> <tr> <td><em><strong>Annualized Growth</strong></em></td> <td><em><strong>6.86%</strong></em></td> <td><em><strong>11.32%</strong></em></td> <td><em><strong>18.06%</strong></em></td> <td><em><strong>13.81%</strong></em></td> <td><em><strong>15.80%</strong></em></td> <td><em><strong>-1.72%</strong></em></td> </tr> <tr> <td><strong>Total Spending 2021 To 2025</strong></td> <td><strong>$116,683</strong></td> <td><strong>$100,650</strong></td> <td><strong>$284,465</strong></td> <td><strong>$441,316</strong></td> <td><strong>$736,340</strong></td> <td> </td> </tr> </table></span> <p><em>(Source: FactSet Research Terminal)</em></p> <p>MSFT is growing growth spending by 14% per year, from $89 billion last year to an estimated $150 billion in 2024.</p> <p>That includes a 50% increase in R&amp;D spending from $19 billion to $30 billion.</p> <p>What do analysts think that means for MSFT's top and bottom lines over the next three years?</p> <h4>MSFT Medium-Term Growth Consensus Forecast</h4> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Year</strong></td> <td><strong>Sales</strong></td> <td><strong>Free Cash Flow</strong></td> <td><strong>EBITDA</strong></td> <td><strong>EBIT (Operating Income)</strong></td> <td><strong>Net Income</strong></td> </tr> <tr> <td>2020</td> <td>$143,015</td> <td>$45,234</td> <td>$65,755</td> <td>$52,959</td> <td>$44,281</td> </tr> <tr> <td>2021</td> <td>$168,088</td> <td>$56,118</td> <td>$81,602</td> <td>$69,916</td> <td>$60,651</td> </tr> <tr> <td>2022</td> <td>$198,655</td> <td>$64,738</td> <td>$99,454</td> <td>$83,961</td> <td>$70,957</td> </tr> <tr> <td>2023</td> <td>$226,582</td> <td>$75,731</td> <td>$114,791</td> <td>$95,965</td> <td>$79,951</td> </tr> <tr> <td>2024</td> <td>$257,200</td> <td>$87,878</td> <td>$131,511</td> <td>$111,903</td> <td>$92,629</td> </tr> <tr> <td><strong>Annualized Growth</strong></td> <td><strong>15.80%</strong></td> <td><strong>18.06%</strong></td> <td><strong>18.92%</strong></td> <td><strong>20.57%</strong></td> <td><strong>20.26%</strong></td> </tr> <tr> <td>Annualized Growth (Ignoring Pandemic)</td> <td>15.23%</td> <td>16.13%</td> <td>17.24%</td> <td>16.97%</td> <td>15.16%</td> </tr> </table></span> <p><em>(Source: FactSet Research Terminal)</em></p> <p><a href=\"https://laohu8.com/S/RDR.SI\">Incredible</a> sales growth of almost 16% annually and bottom-line growth of 18% to 21%.</p> <h4>MSFT Dividend Growth Consensus Forecast</h4> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Year</strong></td> <td><strong>Dividend Consensus</strong></td> <td><strong>FCF/Share Consensus</strong></td> <td><strong>FCF Payout Ratio</strong></td> <td><strong>Retained (Post-Dividend) Free Cash Flow</strong></td> <td><strong>Buyback Potential</strong></td> <td><strong>Debt Repayment Potential</strong></td> </tr> <tr> <td>2022</td> <td>$2.43</td> <td>$8.38</td> <td>29.0%</td> <td>$44,625</td> <td>2.08%</td> <td>76.7%</td> </tr> <tr> <td>2023</td> <td>$2.39</td> <td>$10.04</td> <td>23.8%</td> <td>$57,375</td> <td>2.68%</td> <td>98.7%</td> </tr> <tr> <td>2024</td> <td>$2.57</td> <td>$11.82</td> <td>21.7%</td> <td>$69,375</td> <td>3.23%</td> <td>132.1%</td> </tr> <tr> <td>Total 2022 Through 2026</td> <td>$7.39</td> <td>$30.24</td> <td><strong>24.4%</strong></td> <td><strong>$126,750.00</strong></td> <td><strong>5.91%</strong></td> <td><strong>217.99%</strong></td> </tr> <tr> <td><strong>Annualized Rate</strong></td> <td><strong>2.84%</strong></td> <td><strong>18.76%</strong></td> <td>-13.41%</td> <td>24.68%</td> <td>24.68%</td> <td>31.19%</td> </tr> </table></span> <p><em>(Source: FactSet Research Terminal)</em></p> <p>Credit rating agencies consider a 60% payout ratio safe for this industry and MSFT's is under 30% and analysts think it could fall to 22%.</p> <p>That could allow MSFT to retain $127 billion in post-dividend cash.</p> <p>That's enough to pay off its debt more than 2X over or buy back about 6% of shares over three years at current valuations.</p> <h4>MSFT Buyback Consensus Forecast</h4> <span><table> <colgroup> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Year</strong></td> <td><strong>Consensus Buybacks ($ Millions)</strong></td> <td><strong>% Of Shares (At Current Valuations)</strong></td> <td><strong>Market Cap</strong></td> </tr> <tr> <td>2022</td> <td>$26,899.0</td> <td>1.3%</td> <td>$2,146,877</td> </tr> <tr> <td>2023</td> <td>$31,506.0</td> <td>1.5%</td> <td>$2,146,877</td> </tr> <tr> <td>2024</td> <td>$34,279.0</td> <td>1.6%</td> <td>$2,146,877</td> </tr> <tr> <td><strong>Total 2022-2024</strong></td> <td><strong>$92,684.00</strong></td> <td><strong>4.3%</strong></td> <td>$2,146,877</td> </tr> <tr> <td><em>Annualized Rate</em></td> <td><em>1.45%</em></td> <td><em>Average Annual Buybacks</em></td> <td><em>$30,894.67</em></td> </tr> </table></span> <p><em>(Source: FactSet Research Terminal)</em></p> <p>Analysts expect an average of $31 billion in annual buybacks from MSFT over the next three years, totaling $93 billion and repurchasing about 1.5% of its shares annually.</p> <p>MSFT's historical buyback rate is 2.3% CAGR.</p> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Time Frame (Years)</strong></td> <td><strong>Net Buyback Rate</strong></td> <td><strong>Shares Remaining</strong></td> <td><strong>Net Shares Repurchased</strong></td> <td><strong>Each Share You Own Is Worth X Times More (Not Including Future Growth And Dividends)</strong></td> </tr> <tr> <td>5</td> <td>1.5%</td> <td>92.72%</td> <td>7.28%</td> <td>1.08</td> </tr> <tr> <td>10</td> <td>1.5%</td> <td>85.97%</td> <td>14.03%</td> <td>1.16</td> </tr> <tr> <td>15</td> <td>1.5%</td> <td>79.72%</td> <td>20.28%</td> <td>1.25</td> </tr> <tr> <td>20</td> <td>1.5%</td> <td>73.91%</td> <td>26.09%</td> <td>1.35</td> </tr> <tr> <td>25</td> <td>1.5%</td> <td>68.53%</td> <td>31.47%</td> <td>1.46</td> </tr> <tr> <td>30</td> <td>1.5%</td> <td>63.55%</td> <td>36.45%</td> <td>1.57</td> </tr> </table></span> <p><em>(Source: DK Research Terminal, FactSet)</em></p> <p>If MSFT buys back stock at 1.5%, as analysts expect, then over 30 years that could be a 36% reduction in share count.</p> <ul> <li>boosting EPS, FCF, and dividends per share by 57%</li> <li>not counting MSFT's impressive future growth forecasts</li> </ul> <p>And what about the long-term?</p> <h4>MSFT Long-Term Growth Outlook</h4> <p><figure><span><img loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/20/47572571-16504820603944545.png\"/></span><figcaption><p><span>(Source: FactSet Research Terminal)</span></p></figcaption></figure></p> <ul> <li>20-year growth rate: 13.6% CAGR</li> <li>individual analyst growth range: 12.3% to 18.0% CAGR</li> <li>median growth consensus from all analysts: 14.8% CAGR</li> </ul> <p>If MSFT continues to grow at its historical rate of the last 20 years, which analysts expect will happen (powered largely by cloud computing), then it could deliver life-changing, and rich-retirement-making wealth over time.</p> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Investment Strategy</strong></td> <td><strong>Yield</strong></td> <td><strong>LT Consensus Growth</strong></td> <td><strong>LT Consensus Total Return Potential</strong></td> <td><strong>Long-Term Risk-Adjusted Expected Return</strong></td> <td><strong>Long-Term Inflation And Risk-Adjusted Expected Returns</strong></td> <td><strong>Years To Double Your Inflation &amp; Risk-Adjusted Wealth</strong></td> <td><p><strong>10 Year Inflation And Risk-Adjusted Return</strong></p></td> </tr> <tr> <td>Amazon</td> <td>0.0%</td> <td>23%</td> <td>23.0%</td> <td>16.1%</td> <td>13.6%</td> <td>5.3</td> <td>3.58</td> </tr> <tr> <td>Adam's Planned Correction Buys</td> <td>3.9%</td> <td>18.9%</td> <td>22.8%</td> <td>16.0%</td> <td>13.5%</td> <td>5.3</td> <td>3.54</td> </tr> <tr> <td><strong>Microsoft</strong></td> <td><strong>0.9%</strong></td> <td><strong>14.8%</strong></td> <td><strong>15.7%</strong></td> <td><strong>11.0%</strong></td> <td><strong>8.5%</strong></td> <td><strong>8.5</strong></td> <td><strong>2.26</strong></td> </tr> <tr> <td>Nasdaq (Growth)</td> <td>0.8%</td> <td>14.3%</td> <td>15.1%</td> <td>10.6%</td> <td>8.1%</td> <td>8.9</td> <td>2.17</td> </tr> <tr> <td>Dividend Aristocrats</td> <td>2.2%</td> <td>8.9%</td> <td>11.1%</td> <td>7.8%</td> <td>5.3%</td> <td>13.6</td> <td>1.67</td> </tr> <tr> <td>S&amp;P 500</td> <td>1.4%</td> <td>8.5%</td> <td>9.9%</td> <td>7.0%</td> <td>4.5%</td> <td>16.1</td> <td>1.55</td> </tr> </table></span> <p><em>(Source: Morningstar, FactSet, Ycharts)</em></p> <p>Analysts think MSFT could deliver almost 16% annual returns over the long-term.</p> <p>That's literally on par with some of the greatest investors in history and is better than what analysts expect the Nasdaq to deliver.</p> <h4>Inflation-Adjusted Consensus Return Potential: $1,000 Initial Investment</h4> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Time Frame (Years)</strong></td> <td><strong>7.4% CAGR Inflation-Adjusted S&amp;P Consensus</strong></td> <td><strong>8.6% Inflation-Adjusted Aristocrat Consensus</strong></td> <td><strong>13.2% CAGR Inflation-Adjusted MSFT Consensus</strong></td> <td><strong>Difference Between Inflation Adjusted MSFT Consensus And S&amp;P Consensus</strong></td> </tr> <tr> <td>5</td> <td>$1,429.63</td> <td>$1,511.29</td> <td>$1,859.62</td> <td>$348.32</td> </tr> <tr> <td><strong>10</strong></td> <td><strong>$2,043.84</strong></td> <td><strong>$2,284.01</strong></td> <td><strong>$3,458.18</strong></td> <td><strong>$1,174.17</strong></td> </tr> <tr> <td>15</td> <td>$2,921.94</td> <td>$3,451.81</td> <td>$6,430.90</td> <td>$2,979.09</td> </tr> <tr> <td>20</td> <td>$4,177.29</td> <td>$5,216.70</td> <td>$11,959.03</td> <td>$6,742.32</td> </tr> <tr> <td>25</td> <td>$5,971.97</td> <td>$7,883.98</td> <td>$22,239.23</td> <td>$14,355.25</td> </tr> <tr> <td><strong>30</strong></td> <td><strong>$8,537.71</strong></td> <td><strong>$11,915.01</strong></td> <td><strong>$41,356.49</strong></td> <td><strong>$29,441.48</strong></td> </tr> </table></span> <p><em>(Source: DK Research Terminal, FactSet)</em></p> <p>Even if MSFT only grows at the expected rate for a decade, that is still incredible wealth-building potential.</p> <span><table> <colgroup> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Time Frame (Years)</strong></td> <td><strong>Ratio Aristocrats/S&amp;P</strong></td> <td><strong>Ratio Inflation-Adjusted MURGY Consensus And S&amp;P Consensus</strong></td> </tr> <tr> <td>5</td> <td>1.06</td> <td>1.30</td> </tr> <tr> <td><strong>10</strong></td> <td><strong>1.12</strong></td> <td><strong>1.69</strong></td> </tr> <tr> <td>15</td> <td>1.18</td> <td>2.20</td> </tr> <tr> <td>20</td> <td>1.25</td> <td>2.86</td> </tr> <tr> <td>25</td> <td>1.32</td> <td>3.72</td> </tr> <tr> <td><strong>30</strong></td> <td><strong>1.40</strong></td> <td><strong>4.84</strong></td> </tr> </table></span> <p><em>(Source: DK Research Terminal, FactSet)</em></p> <p>Over the next 10 years, MSFT could outperform the S&amp;P 500 by over 70%</p> <ul><li>potentially much more if the S&amp;P has a lost decade</li></ul> <p>And over a longer time frame could potentially deliver 5X the inflation-adjusted returns.</p> <p>But as strong as MSFT's growth outlook is, it pales in comparison to Amazon's.</p> <h2>AMZN Long-Term Growth Outlook</h2> <p><figure><span><img hspace=\"6\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/19/47572571-16503755250515735.png\" vspace=\"6\"/></span><figcaption><p><span>(Source: FactSet Research Terminal)</span></p></figcaption></figure></p> <ul> <li>20-year growth rate: 32% CAGR</li> <li>consensus growth range (5 sources): 21.8% to 34.8% CAGR</li> <li>individual analyst growth range: 16.7% to 36.0% CAGR</li> <li>median growth consensus from all analysts: 23.0% CAGR</li> </ul> <p>Amazon's growth potential is incredible, driven by online retail, cloud computing, and advertising.</p> <p>That's why it's spending more on growth than most governments.</p> <h4>AMZN Growth Spending Consensus Forecast</h4> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Year</strong></td> <td><strong>SG&amp;A (Selling, General, Administrative)</strong></td> <td><strong>R&amp;D</strong></td> <td><strong>Capex</strong></td> <td><strong>Total Growth Spending</strong></td> <td><strong>Sales</strong></td> <td><strong>Growth Spending/Sales</strong></td> </tr> <tr> <td>2021</td> <td>$40,848</td> <td>$49,407</td> <td>$55,396</td> <td>$145,651</td> <td>$469,822</td> <td>31.00%</td> </tr> <tr> <td>2022</td> <td>$45,807</td> <td>$61,918</td> <td>$58,470</td> <td>$166,195</td> <td>$541,162</td> <td>30.71%</td> </tr> <tr> <td>2023</td> <td>$52,678</td> <td>$71,870</td> <td>$60,543</td> <td>$185,091</td> <td>$634,773</td> <td>29.16%</td> </tr> <tr> <td>2024</td> <td>$57,007</td> <td>$79,177</td> <td>$66,680</td> <td>$202,864</td> <td>$730,456</td> <td>27.77%</td> </tr> <tr> <td>2025</td> <td>$63,919</td> <td>$80,644</td> <td>$74,058</td> <td>$218,621</td> <td>$822,071</td> <td>26.59%</td> </tr> <tr> <td>2026</td> <td>$70,350</td> <td>$88,874</td> <td>$65,660</td> <td>$224,884</td> <td>$913,073</td> <td>24.63%</td> </tr> <tr> <td>2027</td> <td>$76,590</td> <td>$96,909</td> <td>$67,952</td> <td>$241,451</td> <td>$1,018,050</td> <td>23.72%</td> </tr> <tr> <td><strong>Annualized Growth</strong></td> <td><strong>11.05%</strong></td> <td><strong>13.03%</strong></td> <td><strong>7.53%</strong></td> <td><strong>10.69%</strong></td> <td>15.01%</td> <td>-3.76%</td> </tr> <tr> <td><strong>Total Spending 2022 To 2027</strong></td> <td><strong>$366,351</strong></td> <td><strong>$479,392</strong></td> <td><strong>$393,363</strong></td> <td><strong>$699,801</strong></td> <td>15.01%</td> <td>39.28%</td> </tr> </table></span> <p><em>(Source: FactSet Research Terminal)</em></p> <p>AMZN is increasing its growth spending by 11% per year, from $146 billion in 2021 to almost a quarter of a trillion in 2027.</p> <ul><li>almost $100 billion in R&amp;D alone in 2027</li></ul> <p><em>Over the next five years, analysts think Amazon will spend $700 billion on growth</em>, a level of investment that is usually the realm of continent-spanning national governments, not public companies.</p> <p>What kind of growth do analysts expect from $700 billion in growth spending?</p> <h4>AMZN Medium-Term Growth Consensus Forecast</h4> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Year</strong></td> <td><strong>Sales</strong></td> <td><strong>Free Cash Flow</strong></td> <td><strong>EBITDA</strong></td> <td><strong>EBIT (Operating Income)</strong></td> <td><strong>Net Income</strong></td> </tr> <tr> <td>2020</td> <td>$386,064</td> <td>$31,018</td> <td>$57,284</td> <td>$22,899</td> <td>$21,331</td> </tr> <tr> <td>2021</td> <td>$469,822</td> <td>-$9,069</td> <td>$71,994</td> <td>$24,879</td> <td>$33,364</td> </tr> <tr> <td>2022</td> <td>$541,162</td> <td>$30,129</td> <td>$80,760</td> <td>$30,865</td> <td>$25,171</td> </tr> <tr> <td>2023</td> <td>$634,773</td> <td>$49,249</td> <td>$104,819</td> <td>$46,921</td> <td>$39,303</td> </tr> <tr> <td>2024</td> <td>$730,456</td> <td>$69,224</td> <td>$133,792</td> <td>$70,372</td> <td>$58,283</td> </tr> <tr> <td>2025</td> <td>$822,071</td> <td>$85,015</td> <td>$165,979</td> <td>$93,647</td> <td>$76,155</td> </tr> <tr> <td>2026</td> <td>$913,073</td> <td>$151,987</td> <td>$202,841</td> <td>$121,127</td> <td>$102,200</td> </tr> <tr> <td>2027</td> <td>$1,018,050</td> <td>$184,302</td> <td>$238,295</td> <td>$151,031</td> <td>$127,408</td> </tr> <tr> <td><strong>Annualized Growth</strong></td> <td><strong>14.86%</strong></td> <td><strong>28.99%</strong></td> <td><strong>22.59%</strong></td> <td><strong>30.93%</strong></td> <td><strong>29.09%</strong></td> </tr> <tr> <td>Annualized Growth (Ignoring Pandemic)</td> <td>13.76%</td> <td>NA</td> <td>22.08%</td> <td>35.06%</td> <td>25.02%</td> </tr> </table></span> <p><em>(Source: FactSet Research Terminal)</em></p> <p>Amazon's growth is astounding given its size.</p> <ul> <li>14% sales growth outside of the pandemic on a base of nearly $500 billion in revenue</li> <li>free cash flow growing almost 30% per year</li> <li>bottom line growing at 23% to 31% per year</li> </ul> <p>Amazon is expected to generate almost $200 billion in free cash flow in 2027.</p> <ul> <li>after spending over $241 billion on growth</li> <li>the most profitable company in human history, if it grows as expected</li> </ul> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Metric</strong></td> <td><strong>2022 Growth Consensus</strong></td> <td><strong>2023 Growth Consensus</strong></td> <td><strong>2024 Growth Consensus</strong></td> <td><strong>2025 Growth Consensus</strong></td> <td><strong>2026 Growth Consensus</strong></td> <td><p><strong>2027 Growth Consensus</strong></p></td> </tr> <tr> <td>Sales</td> <td>15%</td> <td>18%</td> <td>15%</td> <td>13%</td> <td>11%</td> <td>11%</td> </tr> <tr> <td>EPS</td> <td>-25%</td> <td>52%</td> <td>43%</td> <td>33%</td> <td>33%</td> <td>23%</td> </tr> <tr> <td>Operating Cash Flow</td> <td>88%</td> <td>22%</td> <td>30%</td> <td>24%</td> <td>39%</td> <td>15%</td> </tr> <tr> <td>Free Cash Flow</td> <td>460%</td> <td>52%</td> <td>52%</td> <td>33%</td> <td>24%</td> <td>20%</td> </tr> <tr> <td>EBITDA</td> <td>67%</td> <td>32%</td> <td>25%</td> <td>NA</td> <td>NA</td> <td>NA</td> </tr> <tr> <td>EBIT (operating income)</td> <td>23%</td> <td>50%</td> <td>49%</td> <td>NA</td> <td>NA</td> <td>NA</td> </tr> </table></span> <p><em>(Source: FAST Graphs, FactSet Research)</em></p> <p>Amazon's sales growth is expected to be double-digits for the foreseeable future.</p> <p>Its free cash flow of nearly $200 billion per year in 2027 is expected to be growing at 20%.</p> <ul> <li>there has never been a growth stock like Amazon</li> <li>this level of growth is unprecedented in human history</li> </ul> <p>And here's something that should really get Amazon investors excited.</p> <h4>AMZN Buyback Potential Consensus Forecast</h4> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Year</strong></td> <td><strong>FCF/Share Consensus</strong></td> <td><strong>Retained (Post-Dividend) Free Cash Flow</strong></td> <td><strong>Buyback Potential</strong></td> <td><strong>Debt Repayment Potential</strong></td> </tr> <tr> <td>2022</td> <td>$48.57</td> <td>$24,576</td> <td>1.57%</td> <td>50.4%</td> </tr> <tr> <td>2023</td> <td>$85.81</td> <td>$43,420</td> <td>2.77%</td> <td>89.1%</td> </tr> <tr> <td>2024</td> <td>$164.06</td> <td>$83,014</td> <td>5.29%</td> <td>175.2%</td> </tr> <tr> <td>2025</td> <td>$219.16</td> <td>$110,895</td> <td>7.07%</td> <td>233.4%</td> </tr> <tr> <td>2026</td> <td>$274.67</td> <td>$138,983</td> <td>8.86%</td> <td>285.2%</td> </tr> <tr> <td>2027</td> <td>$331.90</td> <td>$167,941</td> <td>10.70%</td> <td>350.6%</td> </tr> <tr> <td>Total 2022 Through 2026</td> <td>$1,124.17</td> <td><strong>$568,830.02</strong></td> <td><strong>36.24%</strong></td> <td><strong>1166.97%</strong></td> </tr> <tr> <td><strong>Annualized Rate</strong></td> <td><strong>37.75%</strong></td> <td>37.75%</td> <td>37.75%</td> <td>38.16%</td> </tr> </table></span> <p><em>(Source: FactSet Research Terminal)</em></p> <p>Amazon, after spending an estimated $700 billion on growth, is expected to retain $569 billion in free cash flow!</p> <p>That's enough to repay its debt 12X over or buyback 36% of its shares at current valuations.</p> <p>Amazon isn't expected to pay a dividend for the foreseeable future.</p> <p>However, $569 billion in consensus free cash flow, AFTER investing in growth, has to go somewhere.</p> <ul><li>$10 billion buyback authorization is a drop in the bucket of what's needed</li></ul> <h4>Inflation-Adjusted Consensus Return Potential: $1,000 Initial Investment</h4> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Time Frame (Years)</strong></td> <td><strong>7.4% CAGR Inflation-Adjusted S&amp;P Consensus</strong></td> <td><strong>8.6% Inflation-Adjusted Aristocrat Consensus</strong></td> <td><strong>20.5% CAGR Inflation-Adjusted AMZN Consensus</strong></td> <td><strong>Difference Between Inflation Adjusted AMZN Consensus And S&amp;P Consensus</strong></td> </tr> <tr> <td>5</td> <td>$1,429.63</td> <td>$1,511.29</td> <td>$2,541.65</td> <td>$1,030.35</td> </tr> <tr> <td><strong>10</strong></td> <td><strong>$2,043.84</strong></td> <td><strong>$2,284.01</strong></td> <td><strong>$6,459.98</strong></td> <td><strong>$4,175.96</strong></td> </tr> <tr> <td>15</td> <td>$2,921.94</td> <td>$3,451.81</td> <td>$16,418.98</td> <td>$12,967.17</td> </tr> <tr> <td>20</td> <td>$4,177.29</td> <td>$5,216.70</td> <td>$41,731.28</td> <td>$36,514.58</td> </tr> <tr> <td>25</td> <td>$5,971.97</td> <td>$7,883.98</td> <td>$106,066.24</td> <td>$98,182.26</td> </tr> <tr> <td>30</td> <td>$8,537.71</td> <td>$11,915.01</td> <td>$269,583.06</td> <td>$257,668.05</td> </tr> </table></span> <p><em>(Source: DK Research Terminal, FactSet)</em></p> <p>AMZN can't grow at 23% for decades, but even 10 years of expected growth could result in 6.5X inflation-adjusted returns.</p> <span><table> <colgroup> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Time Frame (Years)</strong></td> <td><strong>Ratio Aristocrats/S&amp;P</strong></td> <td><strong>Ratio Inflation-Adjusted AMZN Consensus And S&amp;P Consensus</strong></td> </tr> <tr> <td>5</td> <td>1.06</td> <td>1.78</td> </tr> <tr> <td><strong>10</strong></td> <td><strong>1.12</strong></td> <td><strong>3.16</strong></td> </tr> <tr> <td>15</td> <td>1.18</td> <td>5.62</td> </tr> <tr> <td>20</td> <td>1.25</td> <td>9.99</td> </tr> <tr> <td>25</td> <td>1.32</td> <td>17.76</td> </tr> <tr> <td>30</td> <td>1.40</td> <td>31.58</td> </tr> </table></span> <p><em>(Source: DK Research Terminal, FactSet)</em></p> <p>Over the next 10 years, AMZN could potentially more than triple the S&amp;P 500's returns.</p> <ul><li>potentially much more if the S&amp;P has a lost decade</li></ul> <h2>Valuation: Winner Amazon</h2> <p>For 20 years, outside of bear markets and bubbles, billions of investors have paid 25X to 27X cash flow for Amazon.</p> <ul><li>a 91% statistical probability that about 26X cash flow is intrinsic value for AMZN</li></ul> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Metric</strong></td> <td><strong>Historical Fair Value Multiples (14-Years)</strong></td> <td><strong>2022</strong></td> <td><strong>2023</strong></td> <td><strong>2024</strong></td> <td><strong>2025</strong></td> <td><p><strong>12-Month Forward Fair Value</strong></p></td> </tr> <tr> <td>Operating Cash Flow</td> <td>25.98</td> <td>$4,403.09</td> <td>$5,358.89</td> <td>$6,943.93</td> <td>$8,089.39</td> <td> </td> </tr> <tr> <td>Average</td> <td> </td> <td>$4,403.09</td> <td>$5,358.89</td> <td>$6,943.93</td> <td>$8,089.39</td> <td>$4,697.18</td> </tr> <tr> <td>Current Price</td> <td>$3,085.95</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr> <td><p>Discount To Fair Value</p></td> <td> </td> <td>29.91%</td> <td>42.41%</td> <td>55.56%</td> <td>61.85%</td> <td>34.30%</td> </tr> <tr> <td>Upside To Fair Value</td> <td> </td> <td>42.68%</td> <td>73.65%</td> <td>125.02%</td> <td>162.14%</td> <td>52.21%</td> </tr> <tr> <td>2022 OCF</td> <td>2023 OCF</td> <td>2022 Weighted OCF</td> <td>12-Month Forward OCF</td> <td><strong>12-Month Average Fair Value Forward P/OCF</strong></td> <td><p><em><strong>Current Forward P/OCF</strong></em></p></td> <td> </td> </tr> <tr> <td>$169.48</td> <td>$206.27</td> <td>$63.47</td> <td>$180.80</td> <td><strong>26.0</strong></td> <td><em><strong>17.1</strong></em></td> <td> </td> </tr> </table></span> <p>AMZN trading at 17X forward cash flow is a screaming bargain, especially given its 23% growth consensus.</p> <p>What about Microsoft?</p> <p><figure><span><img loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/20/47572571-16504838918840487.png\"/></span><figcaption><p><span>(Source: FactSet Research Terminal)</span></p></figcaption></figure></p> <p>28.5X forward earnings is historically rich for MSFT which historically trades at 18.5 to 25.5X earnings in the Satya Nadella era.</p> <p>However, when we back out cash, we get an EV/EBITDA (cash-adjusted PE) of 19.8X which is arguably reasonable for one of the world's greatest and widest moat companies.</p> <ul> <li><span>MSFT fair value $267.19</span></li> <li>current price: <span>$287.28</span> </li> <li>discount: <span>-7.52%</span> </li> <li>DK rating: hold</li> </ul> <p>And this brings us to the biggest reason I personally favor Amazon over Microsoft right now.</p> <h2>Long-Term Return Potential: Amazon</h2> <p>What kind of returns do analysts think are possible from AMZN and MSFT today?</p> <p><strong>MSFT 2024 Consensus Total Return Potential</strong></p> <p><figure><span><img loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/20/47572571-1650484337791915.png\"/></span><figcaption><p><span>(Source: FAST Graphs, FactSet)</span></p></figcaption></figure></p> <p>If MSFT grows as analysts expect by 2024, it could deliver 13% total returns, or 6% annually.</p> <p><strong>MSFT 2027 Consensus Total Return Potential</strong></p> <p><figure><span><img loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/20/47572571-16504844471419318.png\"/></span><figcaption><p><span>(Source: FAST Graph, FactSet)</span></p></figcaption></figure><figure><picture> <img loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/20/47572571-165048452396712.png\"/> </picture><figcaption><p><span>(Source: FAST Graph, FactSet)</span></p></figcaption></figure></p> <p>By 2027, if MSFT grows as expected and returns to historical fair value, it could deliver solid 75% total returns or 11% annually.</p> <ul><li><strong>2X the S&amp;P 500 consensus</strong></li></ul> <p>But while double the market's potential returns is nice, just take a look at what Amazon is offering.</p> <h2>Amazon Is The Fattest Pitch On Wall Street</h2> <p><strong>AMZN 2024 Consensus Total Return Potential</strong></p> <p><figure><span> <picture> </picture></span><span><img loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/19/47572571-16503611608391435.png\"/></span><figcaption><p><span>(Source: FAST Graphs, FactSet)</span></p></figcaption></figure></p> <p>If AMZN grows as analysts expect by 2024, it could deliver 129% total returns, or 36% annually.</p> <ul><li>Buffett-like returns from an anti-bubble blue-chip bargain hiding in plain sight</li></ul> <p><strong>AMZN 2027 Consensus Total Return Potential</strong></p> <p><figure><span> <picture> </picture></span><span><img loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/19/47572571-16503612583364534.png\"/></span><figcaption><p><span>(Source: FAST Graph, FactSet)</span></p></figcaption></figure><figure><picture> <img loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/19/47572571-16503613176018143.png\"/> </picture><figcaption><p><span>(Source: FAST Graph, FactSet)</span></p></figcaption></figure></p> <p>By 2027, if AMZN grows as expected and returns to historical fair value, it could more than quadruple and deliver 29% annual total returns.</p> <ul> <li>also Buffett-like returns</li> <li><strong>9X the S&amp;P 500 consensus</strong></li> </ul> <h2>Bottom Line: Both Amazon And Microsoft Are Ultra SWANs That Can Help You Retire In Safety And Splendor</h2> <p>Is it a mistake to buy MSFT at 19.8X cash-adjusted earnings today?</p> <p>That depends on your goals, time horizon, and risk profile.</p> <p><strong>Microsoft Is The Clear Winner If Safety And Quality Are Your Top Priority</strong></p> <span><table> <colgroup> <col/> <col/> <col/> <col/> <col/> </colgroup> <tr> <td><strong>Company</strong></td> <td><strong>Microsoft</strong></td> <td><strong>Amazon</strong></td> <td><strong>MSFT Wins</strong></td> <td><strong>AMZN Wins</strong></td> </tr> <tr> <td>Yield</td> <td>0.9%</td> <td>0.0%</td> <td>1</td> <td> </td> </tr> <tr> <td>LT Growth Consensus</td> <td>14.8%</td> <td>23.0%</td> <td> </td> <td>1</td> </tr> <tr> <td>Total Return Potential</td> <td>15.7%</td> <td>23.0%</td> <td> </td> <td>1</td> </tr> <tr> <td>Risk-Adjusted Expected Return</td> <td>11.0%</td> <td>16.1%</td> <td> </td> <td>1</td> </tr> <tr> <td>Discount To Fair Value</td> <td>-7.0%</td> <td>34.0%</td> <td> </td> <td>1</td> </tr> <tr> <td>DK Rating</td> <td>Hold</td> <td>Very Strong Buy</td> <td> </td> <td>1</td> </tr> <tr> <td>Quality Score</td> <td>99%</td> <td>93%</td> <td>1</td> <td> </td> </tr> <tr> <td>Safety Score</td> <td>100%</td> <td>100%</td> <td>1</td> <td>1</td> </tr> <tr> <td>Dependability Score</td> <td>99%</td> <td>84%</td> <td>1</td> <td> </td> </tr> <tr> <td>Long-Term Risk-Management Industry Percentile</td> <td>92%</td> <td>53%</td> <td>1</td> <td> </td> </tr> <tr> <td>Credit Rating</td> <td>AAA stable</td> <td>AA stable</td> <td>1</td> <td> </td> </tr> <tr> <td>30-Year Bankruptcy Risk</td> <td>0.07%</td> <td>0.51%</td> <td>1</td> <td> </td> </tr> <tr> <td>Dividend Growth Streak (Years)</td> <td>18</td> <td>NA</td> <td>1</td> <td> </td> </tr> <tr> <td>Return On Capital (12-Months)</td> <td>119%</td> <td>30%</td> <td>1</td> <td> </td> </tr> <tr> <td>Return On Capital Industry Percentile</td> <td>80%</td> <td>65%</td> <td>1</td> <td> </td> </tr> <tr> <td>Return On Capital (13-Year Median)</td> <td>136%</td> <td>15%</td> <td>1</td> <td> </td> </tr> <tr> <td>Return On Capital (5-Year trend)</td> <td>-5.60%</td> <td>8%</td> <td> </td> <td>1</td> </tr> <tr> <td><strong>Sum</strong></td> <td> </td> <td> </td> <td><strong>11</strong></td> <td><strong>7</strong></td> </tr> </table></span> <p>But while MSFT is hard to beat in terms of quality, AMZN is also one of the safest companies on earth.</p> <p>And one that offers superior growth, valuation, and total return potential.</p> <h4>AMZN Investment Decision Score</h4> <p><figure><span><img loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/2/15/47572571-16449202227146766.jpg\"/></span><figcaption><p><span>DK</span></p></figcaption></figure><figure><span><img hspace=\"6\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/19/47572571-16503620069290252.png\" vspace=\"6\"/></span><figcaption><p><span>(Source: DK Automated Investment Decision Tool)</span></p></figcaption></figure></p> <p>For anyone comfortable with its risk profile, AMZN is as close to a perfect hyper-growth blue-chip investment as exists on Wall Street today.</p> <ul> <li>35% discount vs. 12% market premium = 47% better valuation</li> <li><em>far superior fundamental quality and safety</em></li> <li><em>130% higher long-term return potential than S&amp;P 500 overtime</em></li> <li><em>4X the risk-adjusted expected return for the next five years</em></li> </ul> <p>The biggest potential reason not to buy AMZN right now is the good but not great 2.2% yield.</p> <ul> <li>QCOM + MMP = 4.0% very safe yield and 17.3% CAGR long-term return potential (K1-tax form)</li> <li>AMZN + BTI = 3.5% very safe yield and 19.0% CAGR long-term return potential (no K1-tax form)</li> </ul> <p>Does this mean that MSFT is a terrible investment right now?</p> <h4>MSFT Investment Decision Score</h4> <p><figure><span><img hspace=\"6\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/20/47572571-16504851233062868.png\" vspace=\"6\"/></span><figcaption><p><span>(Source: DK Automated Investment Decision Tool)</span></p></figcaption></figure></p> <p>Compared to the historically 14% overvalued S&amp;P 500, MSFT is actually a satisfactory investment opportunity.</p> <p>But in a market awash in blue-chip bargains, I recommend taking the biggest swings at the fattest pitches.</p> <blockquote><p>\"Wait for a fat pitch, and then swing for the fences.\" - Warren Buffett</p></blockquote> <p><figure><span><img hspace=\"6\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/19/47572571-1650360437169764.png\" vspace=\"6\"/></span><figcaption><p><span>Ycharts</span></p></figcaption></figure></p> <p>Amazon exploded higher during the pandemic because its fundamentals were booming.</p> <ul> <li>at its August peak, it was approximately fair value</li> <li>and now fundamentals have grown two years with a flat price</li> <li>AMZN has become steadily more undervalued for two years</li> </ul> <p><figure><span><img hspace=\"6\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2022/4/19/47572571-16503606156119852.jpg\" vspace=\"6\"/></span><figcaption><p><span>Ycharts</span></p></figcaption></figure></p> <p>Amazon is a coiled spring hyper-growth Ultra SWAN and a potentially wonderful way to make your own luck on Wall Street.</p> <p>And that's why I and Dividend Kings have spent the last two years steadily building our positions in Amazon.</p> <p>The John Templeton/Howard Marks 80% certainty limit on Wall Street means that you can never be more than 80% sure about any given company.</p> <p>But I can say with 80% absolute certainty that Amazon today represents one of the fattest pitches on Wall Street.</p> <ul> <li>\"I'll die on this hill\" confidence</li> <li>Buffett-like return potential from a blue-chip bargain hiding in plain sight</li> </ul> <p>Anyone buying AMZN today is likely to feel like a stock market genius in 5+ years.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Amazon And Microsoft: The Better Buy Might Surprise You</title>\n<style 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margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAmazon And Microsoft: The Better Buy Might Surprise You\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-04-22 01:15 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4502621-amazon-and-microsoft-better-buy><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Viktor_Gladkov/iStock via Getty Images The surge in interest rates this year, triggered by the highest inflation and most hawkish Fed in 40 years, has been a wonder to behold. Daily Shot  And not ...</p>\n\n<a href=\"https://seekingalpha.com/article/4502621-amazon-and-microsoft-better-buy\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BK4533":"AQR资本管理(全球第二大对冲基金)","BK4576":"AR","BK4525":"远程办公概念","BK4566":"资本集团","BK4535":"淡马锡持仓","BK4524":"宅经济概念","BK4559":"巴菲特持仓","BK4527":"明星科技股","BK4538":"云计算","BK4550":"红杉资本持仓","BK4503":"景林资产持仓","MSFT":"微软","BK4551":"寇图资本持仓","BK4097":"系统软件","BK4561":"索罗斯持仓","AMZN":"亚马逊","BK4504":"桥水持仓","BK4581":"高盛持仓","BK4548":"巴美列捷福持仓","BK4122":"互联网与直销零售","BK4516":"特朗普概念","BK4528":"SaaS概念","BK4579":"人工智能","BK4554":"元宇宙及AR概念","BK4532":"文艺复兴科技持仓","BK4577":"网络游戏","BK4534":"瑞士信贷持仓","BK4567":"ESG概念","BK4507":"流媒体概念"},"source_url":"https://seekingalpha.com/article/4502621-amazon-and-microsoft-better-buy","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2229181512","content_text":"Viktor_Gladkov/iStock via Getty Images The surge in interest rates this year, triggered by the highest inflation and most hawkish Fed in 40 years, has been a wonder to behold. Daily Shot  And not surprisingly, the speed and severity of this move in rates has caused a sharp selloff in many of today's most popular growth stocks. Daily Shot  In fact, the median Nasdaq stock, which includes 3,700 companies, is down almost 40% off its high. Ycharts Today, Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and the Nasdaq (QQQ) are all down about 15% off recent highs. These three all represent great ways to own the highest quality tech names, and compound your wealth over time. Historical Rolling Returns Since 1999 (Source: Portfolio Visualizer Premium) But while such impressive historical returns are nice, you can't buy past returns. So let me compare and contrast Amazon and Microsoft, two of the world's premier tech giants, to show you  why nearly every investor should own these legendary growth blue-chips which is the highest quality company which is the better and safer buy for your hard-earned money today  Quality And Safety: Winner Microsoft (But Not By Much) There are many ways to define and measure quality. So how do I do it? The Dividend King's overall quality scores are based on a 248-point model that includes:  dividend safety balance sheet strength credit ratings credit default swap medium-term bankruptcy risk data short and long-term bankruptcy risk accounting and corporate fraud risk profitability and business model growth consensus estimates management growth guidance historical earnings growth rates historical cash flow growth rates historical dividend growth rates historical sales growth rates cost of capital GF Scores long-term risk-management scores from MSCI, Morningstar, FactSet, S&P, Reuters'/Refinitiv, and Just Capital management quality dividend friendly corporate culture/income dependability long-term total returns (a Ben Graham sign of quality) analyst consensus long-term return potential  In fact, it includes over 1,000 fundamental metrics including the 12 rating agencies we use to assess fundamental risk.  credit and risk management ratings make up 41% of the DK safety and quality model dividend/balance sheet/risk ratings make up 82% of the DK safety and quality model  How do we know that our safety and quality model works well? During the two worst recessions in 75 years, our safety model 87% of blue-chip dividend cuts, the ultimate baptism by fire for any dividend safety model. And then there's the confirmation that our quality ratings are accurate. DK Zen Phoenix: Superior Fundamentals Lead To Superior Long-Term Results        Metric US Stocks 191 Real Money DK Phoenix Recs   Great Recession Dividend Growth -25% 0%   Pandemic Dividend Growth -1% 6%   Positive Total Returns Over The Last 10 Years 42% 99.5% (Greatest Investors In History 60% to 80% Over Time)   Lost Money/Went Bankrupt Over The Last 10 Years 47% 0.5%   Outperformed Market Over The Last Decade (290%) 36% 46%   Bankruptcies Over The Last 10 Years 11% 0%   Permanent 70+% Catastrophic Decline Since 1980 44% 0.5%   100+% Total Return Over The Past 10 Years NA 87%   200+% Total Return Over The Past 10 Years NA 66%   300+% Total Return Over The Past 10 Years NA 44%   400+% Total Return Over The Past 10 Years NA 35%   500+% Total Return Over The Past 10 Years NA 27%   600+% Total Return Over The Past 10 Years NA 23%   700+% Total Return Over The Past 10 Years NA 20%   800+% Total Return Over The Past 10 Years NA 18%   900+% Total Return Over The Past 10 Years NA 18%   1000+% Total Return Over The Past 10 Years NA 16%   Sources: Morningstar, JPMorgan, Seeking Alpha       Basically, historical market data confirms that the DK safety and quality model is comprehensive and accurate. This is why I and my family entrust almost 100% of my life savings to this model and the DK Phoenix blue-chip strategy. How do Microsoft and Amazon score on our safety and quality model? Microsoft Dividend Safety         Rating Dividend Kings Safety Score (161 Point Safety Model) Approximate Dividend Cut Risk (Average Recession) Approximate Dividend Cut Risk In Pandemic Level Recession   1 - unsafe 0% to 20% over 4% 16+%   2- below average 21% to 40% over 2% 8% to 16%   3 - average 41% to 60% 2% 4% to 8%   4 - safe 61% to 80% 1% 2% to 4%   5- very safe 81% to 100% 0.5% 1% to 2%   MSFT 100% 0.50% 1.0%   Risk Rating Low-Risk (92nd industry percentile consensus) AAA stable credit rating 0.07% 30-year bankruptcy risk 20% OR LESS Max Risk Cap Recommendation   Long-Term Dependability         Company DK Long-Term Dependability Score Interpretation Points   Non-Dependable Companies 21% or below Poor Dependability 1   Low Dependability Companies 22% to 60% Below-Average Dependability 2   S&P 500/Industry Average 61% (58% to 70% range) Average Dependability 3   Above-Average 71% to 80% Very Dependable 4   Very Good 81% or higher Exceptional Dependability 5   MSFT 99% Exceptional Dependability 5   Overall Quality        MSFT Final Score Rating   Safety 100% 5/5 very safe   Business Model 100% 3/3 wide moat   Dependability 99% 5/5 exceptional   Total 99% 13/13 Ultra SWAN   Risk Rating 3/3 Low Risk     20% OR LESS Max Risk Cap Rec 5% Margin of Safety For A Potentially Good Buy   Microsoft is as close to a perfect growth blue-chips as exists on Wall Street. And so is Amazon. AMZN Balance Sheet Safety         Rating Dividend Kings Safety Score (161 Point Safety Model) Approximate Dividend Cut Risk (Average Recession) Approximate Dividend Cut Risk In Pandemic Level Recession   1 - unsafe 0% to 20% over 4% 16+%   2- below average 21% to 40% over 2% 8% to 16%   3 - average 41% to 60% 2% 4% to 8%   4 - safe 61% to 80% 1% 2% to 4%   5- very safe 81% to 100% 0.5% 1% to 2%   AMZN 100% NA NA   Risk Rating Medium-Risk (53rd industry percentile risk-management consensus) AA Stable outlook credit rating 0.51% 30-year bankruptcy risk 20% OR LESS Max Risk Cap Recommendation   Long-Term Dependability         Company DK Long-Term Dependability Score Interpretation Points   Non-Dependable Companies 21% or below Poor Dependability 1   Low Dependability Companies 22% to 60% Below-Average Dependability 2   S&P 500/Industry Average 61% (61% to 70% range) Average Dependability 3   Above-Average 71% to 80% Very Dependable 4   Very Good 81% or higher Exceptional Dependability 5   AMZN 84% Exceptional Dependability 5   Overall Quality        AMZN Final Score Rating   Safety 100% 5/5 Very Safe   Business Model 90% 3/3 Wide Moat - Stable   Dependability 84% 5/5 Exceptional   Total 93% 13/13 Ultra SWAN   Risk Rating 2/3 medium Risk     20% OR LESS Max Risk Cap Rec - speculative 5% Margin of Safety For A Potentially Good Buy   However, in this head-to-head comparison, Microsoft edges out Amazon slightly. MSFT: 3rd Highest Quality Master List Company (Out of 506) = 99th Percentile AMZN: 31st Highest Quality Master List Company (Out of 506) = 94th Percentile Why is Microsoft a higher quality company than Amazon? Let's start with the balance sheet. AMZN Credit Ratings         Rating Agency Credit Rating 30-Year Default/Bankruptcy Risk Chance of Losing 100% Of Your Investment 1 In   S&P AA Stable 0.51% 196.1   Fitch AA- Stable 0.55% 181.8   Moody's A1 (A+ equivalent) Stable 0.60% 166.7   Consensus AA- Stable 0.55% 180.7   (Source: S&P, Moody's, Fitch) Rating agencies estimate a 0.55% fundamental risk in buying Amazon today. 1 in 181 chance of losing all your money over the next 30 years Amazon's balance sheet is a fortress. AMZN Leverage Consensus Forecast         Year Debt/EBITDA Net Debt/EBITDA (3.0 Or Less Safe According To Credit Rating Agencies) Interest Coverage (8+ Safe)   2020 0.56 -0.09 13.90   2021 0.68 -0.28 13.75   2022 0.60 -0.28 14.96   2023 0.45 -0.47 21.44   2024 0.32 -0.64 34.48   2025 0.29 -0.99 48.37   2026 0.24 -1.66 61.11   2027 0.20 -1.83 74.33   Annualized Change -13.62% 54.14% 27.06%   (Source: FactSet Research Terminal) Amazon has more cash than debt already and its balance sheet is expected to get rapidly stronger over time. AMZN Balance Sheet Consensus Forecast            Year Total Debt (Millions) Cash Net Debt (Millions) Interest Cost (Millions) EBITDA (Millions) Operating Income (Millions)   2020 $31,816 $42,122 -$5,079 $1,647 $57,284 $22,899   2021 $48,744 $36,220 -$20,346 $1,809 $71,994 $24,879   2022 $48,663 $74,694 -$22,258 $2,063 $80,760 $30,865   2023 $47,163 $113,701 -$49,136 $2,188 $104,819 $46,921   2024 $42,366 $167,534 -$85,508 $2,041 $133,792 $70,372   2025 $47,900 $321,148 -$164,569 $1,936 $165,979 $93,647   2026 $47,900 $465,285 -$335,981 $1,982 $202,841 $121,127   2027 $47,483 $566,899 -$436,861 $2,032 $238,295 $151,031   Annualized Growth 5.89% 44.97% 88.96% 3.05% 22.59% 30.93%   (Source: FactSet Research Terminal)  cash position growing at 45% CAGR net cash growing at 89% CAGR cash flows growing at 23% to 31% CAGR by 2027 an estimated $436 billion in net cash $567 billion in total cash Apple began the largest capital return in history at $250 billion in cash  But Microsoft's balance sheet is even more impressive. Microsoft: Possibly The Safest Company In America         Rating Agency Credit Rating 30-Year Default/Bankruptcy Risk Chance of Losing 100% Of Your Investment 1 In   S&P AAA Stable 0.07% 1428.6   Fitch AAA Stable 0.07% 1428.6   Moody's Aaa (AAA equivalent) Stable 0.07% 1428.6   Consensus AAA Stable 0.07% 1428.6   (Source: S&P, Moody's, Fitch) MSFT is the only company in America with AAA credit ratings from all three rating agencies (JNJ has AAA ratings from two). This means that S&P and Fitch consider MSFT at lower risk of defaulting on its debt than the US Treasury.  S&P rates the US AA+ stable Fitch rates the US AAA with a negative outlook (33% chance of a downgrade)  Why do the rating agencies consider MSFT to be essentially \"risk-free\"? MSFT Leverage Consensus Forecast         Year Debt/EBITDA Net Debt/EBITDA (3.0 Or Less Safe According To Credit Rating Agencies) Interest Coverage (8+ Safe)   2020 0.96 -1.11 25.28   2021 0.71 -0.88 NA   2022 0.53 -0.70 79.74   2023 0.45 -0.69 90.96   2024 0.37 -1.23 108.96   Annualized Change -21.20% 2.45% 44.09%   (Source: FactSet Research Terminal) Microsoft has had more cash than debt for well over a decade, and its financial strength is expected to keep improving steadily. MSFT Balance Sheet Consensus Forecast            Year Total Debt (Millions) Cash Net Debt (Millions) Interest Cost (Millions) EBITDA (Millions) Operating Income (Millions)   2020 $63,327 $13,576 -$73,200 $2,095 $65,755 $52,959   2021 $58,146 $14,224 -$72,188 NA $81,602 $69,916   2022 $52,522 $40,008 -$69,237 $1,053 $99,454 $83,961   2023 $51,431 $88,238 -$78,980 $1,055 $114,791 $95,965   2024 $48,838 $124,229 -$161,300 $1,027 $131,511 $111,903   Annualized Growth -6.29% 73.93% 21.84% -16.32% 18.92% 20.57%   (Source: FactSet Research Terminal) MSFT is expected to have $124 billion in cash by 2024, and including its receivables (it's a recurring monthly revenue business) a net cash position of $161 billion. Impressively, its cash flows are expected to be growing at close to 20%, despite its massive size.  2024 EBITDA of $132 billion would be the 58th largest country on earth if it were its own economy larger than Kuwait's GDP  What about other measures of quality? Ben Graham considered a 20+ year dividend growth streak to be a sign of excellent quality. Justin Law If a company has grown its dividends for 20+ years, there is very little risk that it will cut its dividend or even fail to keep raising it in all economic and industry conditions. Microsoft began paying a quarterly dividend in 2003 and has been raising it without fail ever since. 18-year dividend growth streak (excluding special dividends) That means MSFT will achieve the Graham standard of excellence in 2024 and become a dividend aristocrat in 2029. Amazon doesn't pay a dividend...yet, but is likely to in the future.  $567 billion in cash by 2027 after investing $700 billion in growth over the next five years and $180 billion in annual cash flow adding to the cash pile growing at 20% in 2027 according to analysts  If Amazon grows as analysts expect, a dividend is a mathematical certainty at some point. no dividend is expected until 2028 at the earliest And what about Wall Street's favorite quality metric, profitability?   Profitability: Wall Street's Favorite Quality Proxy Amazon's Profitability Is Sensational AMZN's profitability is historically within the top 10% of peers. AMZN Trailing 12-Month Profitability Vs. Peers        Metric Industry Percentile Major Cyclical Retailers More Profitable Than AMZN (Out Of 1,099)   Operating Margin 57.30 469   Net Margin 74.77 277   Return On Equity 87.52 137   Return On Assets 81.98 198   Return On Capital 65.17 NA   Average 73.35 293   (Source: Gurufocus Premium) AMZN's operating margins have taken a hit as it ramps up its growth spending, plus faces rising input costs on things like shipping. thus the 5% fuel and delivery surcharge it's applying to 3rd party sellers Over the last 20 years, AMZN's industry-leading profitability has been stable or improving, confirming a wide and stable moat. AMZN Margin Consensus Forecast            Year FCF Margin EBITDA Margin EBIT (Operating) Margin Net Margin Return On Capital Expansion Return On Capital Forecast   2020 8.0% 14.8% 5.9% 5.5% 2.80     2021 -1.9% 15.3% 5.3% 7.1% TTM ROC 22.10%   2022 5.6% 14.9% 5.7% 4.7% Latest ROC 29.67%   2023 7.8% 16.5% 7.4% 6.2% 2027 ROC 61.91%   2024 9.5% 18.3% 9.6% 8.0% 2027 ROC 83.12%   2025 10.3% 20.2% 11.4% 9.3% Average 72.52%   2026 16.6% 22.2% 13.3% 11.2% Industry Median 12.00%   2027 18.1% 23.4% 14.8% 12.5% AMZN/Industry Median 6.04   Annualized Growth 12.31% 6.73% 13.99% 12.39% Vs S&P 4.97   Annualized Growth (Ignoring Pandemic) NA 7.32% 18.73% 9.90%       (Source: FactSet Research Terminal) AMZN's free cash flow margins are expected to triple over the next four years, to 18%. All of its margins are expected to grow at rates that many growth stocks would love to grow their sales at. Return on capital is pre-tax profit/operating capital (the money it takes to run the business).  Joel Greenblatt's gold standard proxy for quality and moatiness Analysts are expecting a 73% ROC in 2027. the average investment pays for itself in 17 months vs 7 years for the S&P 500 6X the industry's ROC 5X the S&P 500's ROC  AMZN's ROC Has Been Stable For A Decade AMZN's ability to sustain industry-leading profitability over the decades despite all its challenges and risks confirms a wide and stable moat.   But as amazing as AMZN's profitability is, it pales in comparison to Microsoft's. Microsoft's Profitability Is Even Better  Microsoft's profitability is historically in the top 4% of its peers, earning it a 10/10 on Gurufocus's profitability model. MSFT Trailing 12-Month Profitability Vs. Peers        Metric Industry Percentile Major Software Companies More Profitable Than MSFT (Out Of 2,615)   Operating Margin 97.87 56   Net Margin 96.80 84   Return On Equity 97.09 76   Return On Assets 96.21 99   Return On Capital 79.89 100   Average 93.57 168   (Source: Gurufocus Premium) MSFT's profitability is so immense that it's the 169th most profitable large software company in the world, out of 2,615. MSFT's profitability is the stuff of legend, remaining relatively stable over 20 years. A free cash flow margin of 33% is in the top 10% of all companies on earth. MSFT Margin Consensus Forecast            Year FCF Margin EBITDA Margin EBIT (Operating) Margin Net Margin Return On Capital Expansion Return On Capital Forecast   2020 31.6% 46.0% 37.0% 31.0% 1.05     2021 33.4% 48.5% 41.6% 36.1% TTM ROC 115.93%   2022 32.6% 50.1% 42.3% 35.7% Latest ROC 118.98%   2023 33.4% 50.7% 42.4% 35.3% 2024 ROC 121.26%   2024 34.2% 51.1% 43.5% 36.0% 2024 ROC 124.45%   2025 NA NA NA NA Average 122.86%   2026 NA NA NA NA Industry Median 14.50%   2027 NA NA NA NA MSFT/Industry Median 8.47   Annualized Growth 1.95%  2.69%   4.11%  3.85% Vs S&P 8.41   Annualized Growth (Ignoring Pandemic) 0.77% 1.74% 1.51% -0.06%       (Source: FactSet Research Terminal) MSFT's incredible margins are expected to remain stable or improve slightly in the next few years. Analysts are expecting a 123% ROC in 2027.  the average investment pays for itself in 10 months vs. 7 years for the S&P 500 8.5X the industry's ROC 8X the S&P 500's ROC  MSFT ROC Has Been Stable For Three Decades  MSFT's ability to sustain industry-leading profitability over three decades despite all its challenges and risks confirms a wide and stable moat.   But of course, quality alone isn't enough to generate great returns.  growth without quality and safety leads to eventual catastrophic losses safety and quality without growth leads to bond like returns  Growth Prospects: Winner Amazon Cloud computing is one of the largest secular mega-trends in the world.   Statista In 2021, cloud computing grew at 37% while AWS grew at 37%. Amazon is maintaining market share in cloud computing, despite the competition from MSFT, GOOG, CRM, IBM, and ORCL. Cloud Computing Market Size Worth $1,554.94 Billion by 2030: Grand View Research, Inc. Grandview Research expects the global cloud market to grow about 16% annually through 2030, meaning that AMZN is expected to maintain or even increase its market share. IOT analytics thinks cloud computing will be worth $2 trillion per year within 10 to 20 years, and potentially as much as $10 trillion.  IOT estimates that conservatively cloud computing will grow at least 4X in the next 10 to 20 years likely 13X growth potentially 64X growth cloud computing alone is a secular megatrend that Amazon could surf for decades to come  MSFT's cloud computing business grew 50% in 2021, gaining market share. Not from Amazon but from struggling rivals like IBM (IBM). And for the next few years, analysts expect that MSFT will keep gaining market share in the cloud.  44% growth in 2022 36% growth in 2023 34% growth in 2024  Is it any wonder that MSFT is expected to invest massively into growth? MSFT Growth Spending Consensus Forecast            Year SG&A (Selling, General, Administrative) R&D Capex Total Growth Spending Sales Growth Spending/Sales   2020 $24,709 $19,269 $45,234 $89,212 $143,015 62.38%   2021 $25,224 $20,716 $56,118 $102,058 $168,088 60.72%   2022 $28,218 $23,755 $64,738 $116,711 $198,655 58.75%   2023 $31,017 $26,587 $75,731 $133,335 $226,582 58.85%   2024 $32,224 $29,592 $87,878 $149,694 $257,200 58.20%   Annualized Growth 6.86% 11.32% 18.06% 13.81% 15.80% -1.72%   Total Spending 2021 To 2025 $116,683 $100,650 $284,465 $441,316 $736,340     (Source: FactSet Research Terminal) MSFT is growing growth spending by 14% per year, from $89 billion last year to an estimated $150 billion in 2024. That includes a 50% increase in R&D spending from $19 billion to $30 billion. What do analysts think that means for MSFT's top and bottom lines over the next three years? MSFT Medium-Term Growth Consensus Forecast           Year Sales Free Cash Flow EBITDA EBIT (Operating Income) Net Income   2020 $143,015 $45,234 $65,755 $52,959 $44,281   2021 $168,088 $56,118 $81,602 $69,916 $60,651   2022 $198,655 $64,738 $99,454 $83,961 $70,957   2023 $226,582 $75,731 $114,791 $95,965 $79,951   2024 $257,200 $87,878 $131,511 $111,903 $92,629   Annualized Growth 15.80% 18.06% 18.92% 20.57% 20.26%   Annualized Growth (Ignoring Pandemic) 15.23% 16.13% 17.24% 16.97% 15.16%   (Source: FactSet Research Terminal) Incredible sales growth of almost 16% annually and bottom-line growth of 18% to 21%. MSFT Dividend Growth Consensus Forecast            Year Dividend Consensus FCF/Share Consensus FCF Payout Ratio Retained (Post-Dividend) Free Cash Flow Buyback Potential Debt Repayment Potential   2022 $2.43 $8.38 29.0% $44,625 2.08% 76.7%   2023 $2.39 $10.04 23.8% $57,375 2.68% 98.7%   2024 $2.57 $11.82 21.7% $69,375 3.23% 132.1%   Total 2022 Through 2026 $7.39 $30.24 24.4% $126,750.00 5.91% 217.99%   Annualized Rate 2.84% 18.76% -13.41% 24.68% 24.68% 31.19%   (Source: FactSet Research Terminal) Credit rating agencies consider a 60% payout ratio safe for this industry and MSFT's is under 30% and analysts think it could fall to 22%. That could allow MSFT to retain $127 billion in post-dividend cash. That's enough to pay off its debt more than 2X over or buy back about 6% of shares over three years at current valuations. MSFT Buyback Consensus Forecast         Year Consensus Buybacks ($ Millions) % Of Shares (At Current Valuations) Market Cap   2022 $26,899.0 1.3% $2,146,877   2023 $31,506.0 1.5% $2,146,877   2024 $34,279.0 1.6% $2,146,877   Total 2022-2024 $92,684.00 4.3% $2,146,877   Annualized Rate 1.45% Average Annual Buybacks $30,894.67   (Source: FactSet Research Terminal) Analysts expect an average of $31 billion in annual buybacks from MSFT over the next three years, totaling $93 billion and repurchasing about 1.5% of its shares annually. MSFT's historical buyback rate is 2.3% CAGR.          Time Frame (Years) Net Buyback Rate Shares Remaining Net Shares Repurchased Each Share You Own Is Worth X Times More (Not Including Future Growth And Dividends)   5 1.5% 92.72% 7.28% 1.08   10 1.5% 85.97% 14.03% 1.16   15 1.5% 79.72% 20.28% 1.25   20 1.5% 73.91% 26.09% 1.35   25 1.5% 68.53% 31.47% 1.46   30 1.5% 63.55% 36.45% 1.57   (Source: DK Research Terminal, FactSet) If MSFT buys back stock at 1.5%, as analysts expect, then over 30 years that could be a 36% reduction in share count.  boosting EPS, FCF, and dividends per share by 57% not counting MSFT's impressive future growth forecasts  And what about the long-term? MSFT Long-Term Growth Outlook (Source: FactSet Research Terminal)  20-year growth rate: 13.6% CAGR individual analyst growth range: 12.3% to 18.0% CAGR median growth consensus from all analysts: 14.8% CAGR  If MSFT continues to grow at its historical rate of the last 20 years, which analysts expect will happen (powered largely by cloud computing), then it could deliver life-changing, and rich-retirement-making wealth over time.             Investment Strategy Yield LT Consensus Growth LT Consensus Total Return Potential Long-Term Risk-Adjusted Expected Return Long-Term Inflation And Risk-Adjusted Expected Returns Years To Double Your Inflation & Risk-Adjusted Wealth 10 Year Inflation And Risk-Adjusted Return   Amazon 0.0% 23% 23.0% 16.1% 13.6% 5.3 3.58   Adam's Planned Correction Buys 3.9% 18.9% 22.8% 16.0% 13.5% 5.3 3.54   Microsoft 0.9% 14.8% 15.7% 11.0% 8.5% 8.5 2.26   Nasdaq (Growth) 0.8% 14.3% 15.1% 10.6% 8.1% 8.9 2.17   Dividend Aristocrats 2.2% 8.9% 11.1% 7.8% 5.3% 13.6 1.67   S&P 500 1.4% 8.5% 9.9% 7.0% 4.5% 16.1 1.55   (Source: Morningstar, FactSet, Ycharts) Analysts think MSFT could deliver almost 16% annual returns over the long-term. That's literally on par with some of the greatest investors in history and is better than what analysts expect the Nasdaq to deliver. Inflation-Adjusted Consensus Return Potential: $1,000 Initial Investment          Time Frame (Years) 7.4% CAGR Inflation-Adjusted S&P Consensus 8.6% Inflation-Adjusted Aristocrat Consensus 13.2% CAGR Inflation-Adjusted MSFT Consensus Difference Between Inflation Adjusted MSFT Consensus And S&P Consensus   5 $1,429.63 $1,511.29 $1,859.62 $348.32   10 $2,043.84 $2,284.01 $3,458.18 $1,174.17   15 $2,921.94 $3,451.81 $6,430.90 $2,979.09   20 $4,177.29 $5,216.70 $11,959.03 $6,742.32   25 $5,971.97 $7,883.98 $22,239.23 $14,355.25   30 $8,537.71 $11,915.01 $41,356.49 $29,441.48   (Source: DK Research Terminal, FactSet) Even if MSFT only grows at the expected rate for a decade, that is still incredible wealth-building potential.        Time Frame (Years) Ratio Aristocrats/S&P Ratio Inflation-Adjusted MURGY Consensus And S&P Consensus   5 1.06 1.30   10 1.12 1.69   15 1.18 2.20   20 1.25 2.86   25 1.32 3.72   30 1.40 4.84   (Source: DK Research Terminal, FactSet) Over the next 10 years, MSFT could outperform the S&P 500 by over 70% potentially much more if the S&P has a lost decade And over a longer time frame could potentially deliver 5X the inflation-adjusted returns. But as strong as MSFT's growth outlook is, it pales in comparison to Amazon's. AMZN Long-Term Growth Outlook (Source: FactSet Research Terminal)  20-year growth rate: 32% CAGR consensus growth range (5 sources): 21.8% to 34.8% CAGR individual analyst growth range: 16.7% to 36.0% CAGR median growth consensus from all analysts: 23.0% CAGR  Amazon's growth potential is incredible, driven by online retail, cloud computing, and advertising. That's why it's spending more on growth than most governments. AMZN Growth Spending Consensus Forecast            Year SG&A (Selling, General, Administrative) R&D Capex Total Growth Spending Sales Growth Spending/Sales   2021 $40,848 $49,407 $55,396 $145,651 $469,822 31.00%   2022 $45,807 $61,918 $58,470 $166,195 $541,162 30.71%   2023 $52,678 $71,870 $60,543 $185,091 $634,773 29.16%   2024 $57,007 $79,177 $66,680 $202,864 $730,456 27.77%   2025 $63,919 $80,644 $74,058 $218,621 $822,071 26.59%   2026 $70,350 $88,874 $65,660 $224,884 $913,073 24.63%   2027 $76,590 $96,909 $67,952 $241,451 $1,018,050 23.72%   Annualized Growth 11.05% 13.03% 7.53% 10.69% 15.01% -3.76%   Total Spending 2022 To 2027 $366,351 $479,392 $393,363 $699,801 15.01% 39.28%   (Source: FactSet Research Terminal) AMZN is increasing its growth spending by 11% per year, from $146 billion in 2021 to almost a quarter of a trillion in 2027. almost $100 billion in R&D alone in 2027 Over the next five years, analysts think Amazon will spend $700 billion on growth, a level of investment that is usually the realm of continent-spanning national governments, not public companies. What kind of growth do analysts expect from $700 billion in growth spending? AMZN Medium-Term Growth Consensus Forecast           Year Sales Free Cash Flow EBITDA EBIT (Operating Income) Net Income   2020 $386,064 $31,018 $57,284 $22,899 $21,331   2021 $469,822 -$9,069 $71,994 $24,879 $33,364   2022 $541,162 $30,129 $80,760 $30,865 $25,171   2023 $634,773 $49,249 $104,819 $46,921 $39,303   2024 $730,456 $69,224 $133,792 $70,372 $58,283   2025 $822,071 $85,015 $165,979 $93,647 $76,155   2026 $913,073 $151,987 $202,841 $121,127 $102,200   2027 $1,018,050 $184,302 $238,295 $151,031 $127,408   Annualized Growth 14.86% 28.99% 22.59% 30.93% 29.09%   Annualized Growth (Ignoring Pandemic) 13.76% NA 22.08% 35.06% 25.02%   (Source: FactSet Research Terminal) Amazon's growth is astounding given its size.  14% sales growth outside of the pandemic on a base of nearly $500 billion in revenue free cash flow growing almost 30% per year bottom line growing at 23% to 31% per year  Amazon is expected to generate almost $200 billion in free cash flow in 2027.  after spending over $241 billion on growth the most profitable company in human history, if it grows as expected              Metric 2022 Growth Consensus 2023 Growth Consensus 2024 Growth Consensus 2025 Growth Consensus 2026 Growth Consensus 2027 Growth Consensus   Sales 15% 18% 15% 13% 11% 11%   EPS -25% 52% 43% 33% 33% 23%   Operating Cash Flow 88% 22% 30% 24% 39% 15%   Free Cash Flow 460% 52% 52% 33% 24% 20%   EBITDA 67% 32% 25% NA NA NA   EBIT (operating income) 23% 50% 49% NA NA NA   (Source: FAST Graphs, FactSet Research) Amazon's sales growth is expected to be double-digits for the foreseeable future. Its free cash flow of nearly $200 billion per year in 2027 is expected to be growing at 20%.  there has never been a growth stock like Amazon this level of growth is unprecedented in human history  And here's something that should really get Amazon investors excited. AMZN Buyback Potential Consensus Forecast            Year FCF/Share Consensus Retained (Post-Dividend) Free Cash Flow Buyback Potential Debt Repayment Potential   2022 $48.57 $24,576 1.57% 50.4%   2023 $85.81 $43,420 2.77% 89.1%   2024 $164.06 $83,014 5.29% 175.2%   2025 $219.16 $110,895 7.07% 233.4%   2026 $274.67 $138,983 8.86% 285.2%   2027 $331.90 $167,941 10.70% 350.6%   Total 2022 Through 2026 $1,124.17 $568,830.02 36.24% 1166.97%   Annualized Rate 37.75% 37.75% 37.75% 38.16%   (Source: FactSet Research Terminal) Amazon, after spending an estimated $700 billion on growth, is expected to retain $569 billion in free cash flow! That's enough to repay its debt 12X over or buyback 36% of its shares at current valuations. Amazon isn't expected to pay a dividend for the foreseeable future. However, $569 billion in consensus free cash flow, AFTER investing in growth, has to go somewhere. $10 billion buyback authorization is a drop in the bucket of what's needed Inflation-Adjusted Consensus Return Potential: $1,000 Initial Investment          Time Frame (Years) 7.4% CAGR Inflation-Adjusted S&P Consensus 8.6% Inflation-Adjusted Aristocrat Consensus 20.5% CAGR Inflation-Adjusted AMZN Consensus Difference Between Inflation Adjusted AMZN Consensus And S&P Consensus   5 $1,429.63 $1,511.29 $2,541.65 $1,030.35   10 $2,043.84 $2,284.01 $6,459.98 $4,175.96   15 $2,921.94 $3,451.81 $16,418.98 $12,967.17   20 $4,177.29 $5,216.70 $41,731.28 $36,514.58   25 $5,971.97 $7,883.98 $106,066.24 $98,182.26   30 $8,537.71 $11,915.01 $269,583.06 $257,668.05   (Source: DK Research Terminal, FactSet) AMZN can't grow at 23% for decades, but even 10 years of expected growth could result in 6.5X inflation-adjusted returns.        Time Frame (Years) Ratio Aristocrats/S&P Ratio Inflation-Adjusted AMZN Consensus And S&P Consensus   5 1.06 1.78   10 1.12 3.16   15 1.18 5.62   20 1.25 9.99   25 1.32 17.76   30 1.40 31.58   (Source: DK Research Terminal, FactSet) Over the next 10 years, AMZN could potentially more than triple the S&P 500's returns. potentially much more if the S&P has a lost decade Valuation: Winner Amazon For 20 years, outside of bear markets and bubbles, billions of investors have paid 25X to 27X cash flow for Amazon. a 91% statistical probability that about 26X cash flow is intrinsic value for AMZN               Metric Historical Fair Value Multiples (14-Years) 2022 2023 2024 2025 12-Month Forward Fair Value   Operating Cash Flow 25.98 $4,403.09 $5,358.89 $6,943.93 $8,089.39     Average   $4,403.09 $5,358.89 $6,943.93 $8,089.39 $4,697.18   Current Price $3,085.95             Discount To Fair Value   29.91% 42.41% 55.56% 61.85% 34.30%   Upside To Fair Value   42.68% 73.65% 125.02% 162.14% 52.21%   2022 OCF 2023 OCF 2022 Weighted OCF 12-Month Forward OCF 12-Month Average Fair Value Forward P/OCF Current Forward P/OCF     $169.48 $206.27 $63.47 $180.80 26.0 17.1     AMZN trading at 17X forward cash flow is a screaming bargain, especially given its 23% growth consensus. What about Microsoft? (Source: FactSet Research Terminal) 28.5X forward earnings is historically rich for MSFT which historically trades at 18.5 to 25.5X earnings in the Satya Nadella era. However, when we back out cash, we get an EV/EBITDA (cash-adjusted PE) of 19.8X which is arguably reasonable for one of the world's greatest and widest moat companies.  MSFT fair value $267.19 current price: $287.28  discount: -7.52%  DK rating: hold  And this brings us to the biggest reason I personally favor Amazon over Microsoft right now. Long-Term Return Potential: Amazon What kind of returns do analysts think are possible from AMZN and MSFT today? MSFT 2024 Consensus Total Return Potential (Source: FAST Graphs, FactSet) If MSFT grows as analysts expect by 2024, it could deliver 13% total returns, or 6% annually. MSFT 2027 Consensus Total Return Potential (Source: FAST Graph, FactSet)  (Source: FAST Graph, FactSet) By 2027, if MSFT grows as expected and returns to historical fair value, it could deliver solid 75% total returns or 11% annually. 2X the S&P 500 consensus But while double the market's potential returns is nice, just take a look at what Amazon is offering. Amazon Is The Fattest Pitch On Wall Street AMZN 2024 Consensus Total Return Potential   (Source: FAST Graphs, FactSet) If AMZN grows as analysts expect by 2024, it could deliver 129% total returns, or 36% annually. Buffett-like returns from an anti-bubble blue-chip bargain hiding in plain sight AMZN 2027 Consensus Total Return Potential   (Source: FAST Graph, FactSet)  (Source: FAST Graph, FactSet) By 2027, if AMZN grows as expected and returns to historical fair value, it could more than quadruple and deliver 29% annual total returns.  also Buffett-like returns 9X the S&P 500 consensus  Bottom Line: Both Amazon And Microsoft Are Ultra SWANs That Can Help You Retire In Safety And Splendor Is it a mistake to buy MSFT at 19.8X cash-adjusted earnings today? That depends on your goals, time horizon, and risk profile. Microsoft Is The Clear Winner If Safety And Quality Are Your Top Priority          Company Microsoft Amazon MSFT Wins AMZN Wins   Yield 0.9% 0.0% 1     LT Growth Consensus 14.8% 23.0%   1   Total Return Potential 15.7% 23.0%   1   Risk-Adjusted Expected Return 11.0% 16.1%   1   Discount To Fair Value -7.0% 34.0%   1   DK Rating Hold Very Strong Buy   1   Quality Score 99% 93% 1     Safety Score 100% 100% 1 1   Dependability Score 99% 84% 1     Long-Term Risk-Management Industry Percentile 92% 53% 1     Credit Rating AAA stable AA stable 1     30-Year Bankruptcy Risk 0.07% 0.51% 1     Dividend Growth Streak (Years) 18 NA 1     Return On Capital (12-Months) 119% 30% 1     Return On Capital Industry Percentile 80% 65% 1     Return On Capital (13-Year Median) 136% 15% 1     Return On Capital (5-Year trend) -5.60% 8%   1   Sum     11 7   But while MSFT is hard to beat in terms of quality, AMZN is also one of the safest companies on earth. And one that offers superior growth, valuation, and total return potential. AMZN Investment Decision Score DK(Source: DK Automated Investment Decision Tool) For anyone comfortable with its risk profile, AMZN is as close to a perfect hyper-growth blue-chip investment as exists on Wall Street today.  35% discount vs. 12% market premium = 47% better valuation far superior fundamental quality and safety 130% higher long-term return potential than S&P 500 overtime 4X the risk-adjusted expected return for the next five years  The biggest potential reason not to buy AMZN right now is the good but not great 2.2% yield.  QCOM + MMP = 4.0% very safe yield and 17.3% CAGR long-term return potential (K1-tax form) AMZN + BTI = 3.5% very safe yield and 19.0% CAGR long-term return potential (no K1-tax form)  Does this mean that MSFT is a terrible investment right now? MSFT Investment Decision Score (Source: DK Automated Investment Decision Tool) Compared to the historically 14% overvalued S&P 500, MSFT is actually a satisfactory investment opportunity. But in a market awash in blue-chip bargains, I recommend taking the biggest swings at the fattest pitches. \"Wait for a fat pitch, and then swing for the fences.\" - Warren Buffett Ycharts Amazon exploded higher during the pandemic because its fundamentals were booming.  at its August peak, it was approximately fair value and now fundamentals have grown two years with a flat price AMZN has become steadily more undervalued for two years  Ycharts Amazon is a coiled spring hyper-growth Ultra SWAN and a potentially wonderful way to make your own luck on Wall Street. And that's why I and Dividend Kings have spent the last two years steadily building our positions in Amazon. The John Templeton/Howard Marks 80% certainty limit on Wall Street means that you can never be more than 80% sure about any given company. But I can say with 80% absolute certainty that Amazon today represents one of the fattest pitches on Wall Street.  \"I'll die on this hill\" confidence Buffett-like return potential from a blue-chip bargain hiding in plain sight  Anyone buying AMZN today is likely to feel like a stock market genius in 5+ years.","news_type":1},"isVote":1,"tweetType":1,"viewCount":664,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"defaultTab":"followers","isTTM":true}