# Microsoft CDR (CAD Hedged) (MSFT.TO) fundamentals

Data as of 2026-11-02. TSX, Canada. Sector: Technology / Software. Price C$35.28, market value C$4.90 trillion.

## Valuation
- **P/E (trailing): 26.5×** (5-yr avg 42.1×, 3-yr avg 39.3×). Microsoft CDR (CAD Hedged) trades at 26.5× trailing earnings, well below its own five-year average of 42.1×: cheap by its own standards. The Technology median in the September 2026 study was 32.1×.
- **Price / sales: 14.1×**. Each dollar of revenue is priced at 14.1×, a level that requires very high margins or very fast growth to justify.
- **Price / book: 9.4×**. The shares trade at 9.4× book value; most of the value is in earnings power and intangibles rather than the balance sheet.
- **EV / EBITDA: 21.9×**. Enterprise value is 21.9× operating earnings before depreciation, the multiple that ignores how the company is financed; above 20× is demanding.
- **Free-cash-flow yield: 1.2%** (5-yr avg 1.7%). Free cash flow equals 1.2% of the market value, below its five-year average of 1.7%, so the shares are pricier on cash than usual.
- **Earnings yield: 3.8%**. The inverse of the P/E: 3.8% of the price is earned each year.

## Profitability
- **Gross margin: 67.7%**. Microsoft CDR (CAD Hedged) keeps 67.7% of revenue after the direct cost of what it sells, the kind of margin that comes with software, brands or pricing power.
- **Operating margin: 47.1%**. 47.1% of revenue is left after running the business, an exceptional level.
- **Net margin: 40.3%**. 40.3% of each dollar of sales reaches the bottom line.
- **Return on equity: 30.2%**. 30.2% on shareholders' equity is excellent if it is not driven by leverage; sustained above 20% usually signals a competitive advantage.
- **Return on invested capital: 31.0%**. Return on all capital, debt included, is 31.0%: comfortably above what that capital costs.
- **Return on assets: 18.8%**. Each dollar of assets produces 18.8% of profit.

## Growth
- **Revenue growth (1 yr): 17.8%** (3-yr 16.1%/yr). Revenue grew 17.8% over the last year.
- **Free-cash-flow growth (3 yr): 4.0%/yr**. Free cash flow has compounded at 4.0% a year over three years, lagging earnings: check whether profits are turning into cash.

## Financial health
- **Debt to equity: 0.13**. Debt is 0.13 times equity: a conservative balance sheet.
- **Net debt / EBITDA: net cash**. Microsoft CDR (CAD Hedged) holds more cash than debt.
- **Interest coverage: 50.6×**. Operating profit covers interest 50.6× over, a safe margin.
- **Current ratio: 1.23** (quick 1.22). Current assets cover the next year's liabilities 1.23 times.
- **Altman Z-score: 11.58**. A Z-score of 11.58 places the company in the safe zone for bankruptcy risk.
- **Piotroski F-score: 5/9**. 5 of 9 checks pass: mixed.

## Dividends
- **Dividend yield: 0.70%** (C$0.26 per share, trailing). Microsoft CDR (CAD Hedged) yields 0.70%, a modest yield more typical of a growth-oriented payer.
- **Payout ratio: 20%** (45% of free cash flow). 20% of earnings goes out as dividends, leaving room to keep raising it.
- **Consecutive years of increases: 4**. 4 straight years of increases.
- **Shareholder yield: 1.1%**. Dividends plus net buybacks return 1.1% of the market value a year.

## Price and momentum
- **Total return (1 yr): -2.6%** (YTD 6.2%, 3-mo 11.9%). The shares are down 2.6% over twelve months including dividends.
- **From 52-week high: -8.2%** (43.4% above the low). Trading 8% below its 52-week high.
- **200-day average: above**. The price sits above its 200-day moving average, the usual definition of an uptrend.
- **RSI (14-day): 49**. An RSI of 49 is neutral.
- **Beta (1 yr): 0.58** (volatility 33%). Beta of 0.58 against the S&P/TSX Composite: the shares move much less than the market.

Live score and charts: https://foliofundamentals.com/analyzer?s=MSFT.TO · Page: https://foliofundamentals.com/stocks/msft.to

Not investment advice.