Software and IT services · 24/36 against 25/36 checks · to 2026-09-08
META vs MSFT.
MetaRuns Facebook, Instagram and WhatsApp, and funds a long bet on the next computing platform.
MicrosoftSells Windows, Office and Azure cloud computing to businesses and consumers.→Meta (META) and Microsoft (MSFT) are within reach of each other at $1.56T and $3.67T, and on the filings Microsoft passes more, 25 checks of 36 against 24.
Which passes more checks?
widest gap first→The two are furthest apart on Shareholder returns, where Microsoft passes 3 more of the six. They score identically on 3 of the six, so the difference between them is narrower than a headline suggests.
| META | MSFT | |
|---|---|---|
| Shareholder returns | 2/6 | 5/6 |
| Value | 2/6 | 1/6 |
| Quality | 6/6 | 5/6 |
| Growth | 5/6 | 5/6 |
| Health | 5/6 | 5/6 |
| Trend analysis | 4/6 | 4/6 |
| All checks | 24/36 | 25/36 |
→Microsoft turns over $331.8B to Meta's $228.2B, 1.5 times as much. Meta keeps 29.8% of revenue as profit against 40.3% at Microsoft.
Which hands more back to owners?
→Both pay: Microsoft yields the more at 0.7% against 0.3%. A yield rises when a price falls, so read it beside the payout checks in each report.
| META | MSFT | |
|---|---|---|
| Dividend yield | 0.3% | 0.7% |
| Payout ratio | 7.8% | 19.8% |
| Years of unbroken dividend | - | - |
Which is cheaper?
→Meta is the cheaper of the two on earnings, 23.2x against 27.5x. Against their own histories, Meta is above its 23.1x median and Microsoft is above its 26.9x.
| META | MSFT | |
|---|---|---|
| Share price | $613.48 | $493.95 |
| Market cap | $1.56T | $3.67T |
| P/E | 23.2x | 27.5x |
| P/E, own median own 11-year median / own 11-year median | 23.1x | 26.9x |
| P/S | 6.8x | 11.1x |
| Free cash flow yield | 2.6% | 1.8% |
Which keeps more of each sale?
→Meta keeps more of each sale: gross margin of 81.7% against 67.9%, a gap of 14 points that flows into everything below it.
| META | MSFT | |
|---|---|---|
| Gross margin | 81.7% | 67.9% |
| Operating margin | 38.1% | 46.8% |
| Return on equity | 26.1% | 30.2% |
Which is growing faster, META or MSFT?
→Meta grew revenue faster last year, +27.7% against +17.8% at Microsoft - 10 points apart. Over three years the order is the same, Meta at +19.9% and Microsoft at +16.1%.
| META | MSFT | |
|---|---|---|
| Revenue (TTM) | $228.2B | $331.8B |
| Revenue growth, 1 year | +27.7% | +17.8% |
| Revenue CAGR, 3 years | +19.9% | +16.1% |
| Net income (TTM) | $68.1B | $133.7B |
| Free cash flow (TTM) | $41.0B | $67.0B |
Which balance sheet is stronger?
→Microsoft carries much the lighter balance sheet, 0.09x of debt to equity against 0.32x - which matters most in the year a downturn arrives, not this one.
| META | MSFT | |
|---|---|---|
| Debt / equity | 0.32x | 0.09x |
| Interest coverage | 45.3x | 50.9x |
| Cash and short-term investments | $90.3B | $76.8B |
Where they differ most
the checks behind the gapShareholder returns: Microsoft 3 ahead
- Share count isn't climbing shares down 0.3% over 3 years
- Buybacks outpace the stock issued to staff $22.3B bought back vs $12.4B of stock compensation
- What it hands back fits inside its cash flow 72.7% vs 100.0%
- Buybacks outpace the stock issued to staff $3.3B bought back vs $25.1B of stock compensation
- Meaningful yield to owners (dividends and buybacks) $8.7B returned, 0.6% of market value
- Reliable payer, never cut paid 2/10 years, worst year-on-year change 5.0%
Value: Meta 1 ahead
- Earnings yield beats a long bond (4%) 4.3% vs 4.0%
- Price isn't outrunning growth PEG 0.58
- Earnings yield beats a long bond (4%) 3.6% vs 4.0%
- Free cash flow yield above 3% 1.8% vs 3.0%
- Cheap on enterprise value 19.16 vs 14.00 (peer median)