Intuit (NASDAQ:INTU) and Microsoft (NASDAQ:MSFT) Financial Contrast

Intuit (NASDAQ:INTU) and Microsoft (NASDAQ:MSFT) are both large-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, dividends, valuation and risk.

Institutional and Insider Ownership

83.7% of Intuit shares are owned by institutional investors. Comparatively, 71.1% of Microsoft shares are owned by institutional investors. 2.5% of Intuit shares are owned by company insiders. Comparatively, 0.0% of Microsoft shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Intuit has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Microsoft has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Valuation and Earnings

This table compares Intuit and Microsoft”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Intuit	$19.43 billion	5.72	$3.87 billion	$14.63	27.30
Microsoft	$281.72 billion	10.58	$101.83 billion	$15.99	25.10

Microsoft has higher revenue and earnings than Intuit. Microsoft is trading at a lower price-to-earnings ratio than Intuit, indicating that it is currently the more affordable of the two stocks.

Dividends

Intuit pays an annual dividend of $4.80 per share and has a dividend yield of 1.2%. Microsoft pays an annual dividend of $3.64 per share and has a dividend yield of 0.9%. Intuit pays out 32.8% of its earnings in the form of a dividend. Microsoft pays out 22.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Intuit has raised its dividend for 13 consecutive years and Microsoft has raised its dividend for 23 consecutive years.

Profitability

This table compares Intuit and Microsoft’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Intuit	21.19%	23.52%	13.10%
Microsoft	39.04%	32.34%	18.49%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Intuit and Microsoft, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Intuit	0	6	22	0	2.79
Microsoft	0	4	39	2	2.96

Intuit currently has a consensus target price of $772.42, suggesting a potential upside of 93.40%. Microsoft has a consensus target price of $591.95, suggesting a potential upside of 47.50%. Given Intuit’s higher possible upside, research analysts clearly believe Intuit is more favorable than Microsoft.

Summary

Microsoft beats Intuit on 12 of the 18 factors compared between the two stocks.

About Intuit

Intuit Inc. provides financial management and compliance products and services for consumers, small businesses, self-employed, and accounting professionals in the United States, Canada, and internationally. The company operates in four segments: Small Business & Self-Employed, Consumer, Credit Karma, and ProTax. The Small Business & Self-Employed segment provides QuickBooks services, that includes financial and business management online services and desktop software, payroll solutions, time tracking, merchant payment processing solutions, and financing for small businesses; and Mailchimp services, such as e-commerce, marketing automation, and customer relationship management. This segment also offers QuickBooks online services and desktop software solutions comprising QuickBooks Online Advanced, a cloud-based solution; QuickBooks Enterprise, a hosted solution; and QuickBooks Self-Employed solution; payment-processing solutions, including credit and debit cards, Apple Pay, and ACH payment services; and financial supplies and financing for small businesses, as well as electronic filing of federal and state income tax returns. The Consumer segment provides TurboTax income tax preparation products and services. The Credit Karma segment offers consumers with a personal finance platform that provides personalized recommendations of home, auto, and personal loans, as well as credit cards and insurance products. The ProTax segment provides Lacerte, ProSeries, and ProFile desktop tax-preparation software products; and ProConnect Tax Online tax products, electronic tax filing service, and bank products and related services. It sells products and services through various sales and distribution channels, including multi-channel shop-and-buy experiences, websites and call centers, mobile application stores, and retail and other channels. The company was founded in 1983 and is headquartered in Mountain View, California.

About Microsoft

Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services. This segment also provides LinkedIn; and dynamics business solutions, including Dynamics 365, a set of intelligent, cloud-based applications across ERP, CRM, power apps, and power automate; and on-premises ERP and CRM applications. The Intelligent Cloud segment offers server products and cloud services, such as azure and other cloud services; SQL and windows server, visual studio, system center, and related client access licenses, as well as nuance and GitHub; and enterprise services including enterprise support services, industry solutions, and nuance professional services. The More Personal Computing segment offers Windows, including windows OEM licensing and other non-volume licensing of the Windows operating system; Windows commercial comprising volume licensing of the Windows operating system, windows cloud services, and other Windows commercial offerings; patent licensing; and windows Internet of Things; and devices, such as surface, HoloLens, and PC accessories. Additionally, this segment provides gaming, which includes Xbox hardware and content, and first- and third-party content; Xbox game pass and other subscriptions, cloud gaming, advertising, third-party disc royalties, and other cloud services; and search and news advertising, which includes Bing, Microsoft News and Edge, and third-party affiliates. The company sells its products through OEMs, distributors, and resellers; and directly through digital marketplaces, online, and retail stores. The company was founded in 1975 and is headquartered in Redmond, Washington.