Contrasting Microsoft (NASDAQ:MSFT) and Dynatrace (NASDAQ:DT)

Microsoft (NASDAQ:MSFT) and Dynatrace (NYSE:DT) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Analyst Recommendations

This is a summary of current recommendations and price targets for Microsoft and Dynatrace, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Microsoft 0 0 29 1 3.03
Dynatrace 0 3 9 0 2.75

Microsoft presently has a consensus price target of $159.89, indicating a potential upside of 6.70%. Dynatrace has a consensus price target of $26.46, indicating a potential upside of 5.79%. Given Microsoft’s stronger consensus rating and higher probable upside, analysts clearly believe Microsoft is more favorable than Dynatrace.

Profitability

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

Net Margins Return on Equity Return on Assets
Microsoft 31.66% 39.14% 14.23%
Dynatrace N/A N/A N/A

Earnings & Valuation

This table compares Microsoft and Dynatrace’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Microsoft $125.84 billion 9.08 $39.24 billion $4.75 31.55
Dynatrace N/A N/A N/A N/A N/A

Microsoft has higher revenue and earnings than Dynatrace.

Dividends

Microsoft pays an annual dividend of $2.04 per share and has a dividend yield of 1.4%. Dynatrace does not pay a dividend. Microsoft pays out 42.9% of its earnings in the form of a dividend.

Institutional and Insider Ownership

71.8% of Microsoft shares are held by institutional investors. Comparatively, 87.1% of Dynatrace shares are held by institutional investors. 1.4% of Microsoft shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Microsoft beats Dynatrace on 10 of the 12 factors compared between the two stocks.

Microsoft Company Profile

Microsoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide. Its company's Productivity and Business Processes segment offers Office 365 commercial products and services, such as Office, Exchange, SharePoint, Skype for Business, Microsoft Teams, and related Client Access Licenses (CALs); Office 365 consumer services, including Skype, Outlook.com, and OneDrive; LinkedIn online professional network; and Dynamics business solutions comprising financial management, enterprise resource planning, customer relationship management, supply chain management, and analytics applications for small and medium businesses, large organizations, and divisions of enterprises. The company's Intelligent Cloud segment licenses server products and cloud services, such as SQL Server, Windows Server, Visual Studio, System Center, and related CALs, as well as Azure, a cloud platform; and enterprise services, including premier support and Microsoft consulting services to assist customers in developing, deploying, and managing Microsoft server and desktop solutions, as well as provides training and certification to developers and IT professionals. Its More Personal Computing segment offers Windows OEM, volume, and other non-volume licensing of the Windows operating system; patent licensing, Windows Internet of Things, and MSN display advertising; devices comprising Surface, PC accessories, and other intelligent devices; Xbox hardware and software and services; and Bing and Bing Ads search advertising. It markets its products through original equipment manufacturers, distributors, and resellers; and online and Microsoft retail stores. Microsoft Corporation has collaboration with E.ON, NIIT Technologies Ltd., and CUNA Mutual Group; strategic alliance with Nielsen Holdings plc and PAREXEL International Corp.; and a strategic collaboration with Mastercard Incorporated. The company was founded in 1975 and is headquartered in Redmond, Washington.

Dynatrace Company Profile

Dynatrace, Inc. provides a software intelligence platform for the enterprise cloud applications. It offers Dynatrace, a platform for running an enterprise cloud. The company's products include AppMon, Classic Real User Monitoring, Network Application Monitoring, and Synthetic Classic. Its platform allows its customers to modernize and automate IT operations, develop and release software, and enhance user experiences. The company also offers implementation, consulting, and training services. Dynatrace, Inc. markets its products through a combination of direct sales team and a network of partners, including resellers, system integrators, and managed service providers. It serves customers in various industries comprising banking, insurance, retail, manufacturing, travel, and software. The company operates in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. Dynatrace, Inc. is headquartered in Waltham, Massachusetts.

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